Taxes Foreign Buyers Must Pay When Purchasing Property in Spain
By Property-Lawyers.comUpdated May 2026⏱ 10 min read✔ Reviewed by qualified Spanish tax advisors
Planning to buy property in Spain as a foreigner? This complete guide covers every tax you will encounter — from signing your first contract to annual obligations as an owner — so you can budget accurately and avoid costly surprises. The total tax burden varies significantly by region, property type and purchase method.
Who is this guide for? Non-Spanish nationals — EU and non-EU — buying residential property in Spain as a holiday home, primary residence, or investment. All figures reflect legislation in force for 2026.
Spain’s property tax system is multi-layered. The amount you pay depends on several factors — not simply the purchase price. Understanding these variables before making an offer allows you to plan your finances accurately.
Factor 1
New build versus resale
This single factor determines whether you pay VAT (IVA) or Transfer Tax (ITP) — two taxes that are mutually exclusive. New builds from a developer attract VAT; resale properties attract ITP. You never pay both on the same purchase.
Factor 2
Region where the property is located
Spain’s 17 autonomous communities each set their own ITP and Stamp Duty (AJD) rates. A property in Andalusia (7% ITP) is taxed very differently from one in the Balearic Islands (8–13% tiered) or Madrid (6%).
Factor 3
Cash purchase versus mortgage
Under the Spanish Mortgage Law of 2019, banks pay Stamp Duty (AJD) on the mortgage deed. Cash buyers purchasing new builds pay AJD themselves on the purchase deed — a difference of 0.5% to 1.5% of the purchase price.
Factor 4
Free-market versus protected housing (VPO)
Officially protected housing carries reduced tax rates. VAT on a VPO new build is 4% rather than 10%, and ITP rates are also reduced in most regions.
When purchasing a newly constructed property directly from a developer (vivienda de obra nueva), two taxes apply at the point of sale.
VAT (IVA — Impuesto sobre el Valor Añadido)
10% VAT on standard free-market new-build residential properties
4% VAT on officially protected housing (VPO)
21% VAT on commercial or non-residential premises
VAT is paid to the developer as part of the purchase price and is not reclaimable by private residential buyers.
Stamp Duty (AJD — Actos Jurídicos Documentados)
Rate: 0.5% to 1.5% of purchase price (varies by region)
If you use a mortgage → the bank pays AJD on the mortgage deed (Mortgage Law 2019)
If you pay cash → the buyer pays AJD on the purchase deed
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Practical tip: Always confirm with your lawyer whether the developer’s quoted price is inclusive or exclusive of VAT. Misunderstanding this is a common source of budget overruns for foreign buyers. Read our full guide to Stamp Duty (AJD) in Spain.
Taxes on Resale Properties in Spain
If the property has had a previous owner — regardless of its age or condition — it is a resale property and a different tax regime applies.
Property Transfer Tax (ITP — Impuesto de Transmisiones Patrimoniales)
ITP is the principal tax on resale purchases. It is paid by the buyer, rates are set by each autonomous community, and it ranges nationally from 6% to 13%. Since 2022 it is calculated on the purchase price or the Valor de Referencia — whichever is higher.
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Valor de Referencia: Since January 2022, Spanish tax authorities use an administrative reference value as the minimum taxable base for ITP. Even if you agree a lower price, ITP may be calculated on this value. Your lawyer checks this before you make any offer. Read our full guide to ITP Tax in Spain.
Full Tax Comparison: New Build vs Resale
Tax
New Build
Resale
Who Pays
When
VAT (IVA)
10% / 4% VPO
✗ N/A
Buyer
At completion
Transfer Tax (ITP)
✗ N/A
6–13% by region
Buyer
Within 30 working days
Stamp Duty (AJD)
0.5–1.5%
✗ N/A
Buyer (cash) / Bank (mortgage)
At notary signing
Notary fees
~€700–€1,200
~€700–€1,200
Buyer
At signing
Land Registry
€400–€600
€400–€600
Buyer
Post-completion
Legal fees
1–1.5%
1–1.5%
Buyer
Agreed in advance
Mortgage valuation
€250–€600
€250–€600
Buyer (if mortgage)
Pre-approval
ITP Rates by Autonomous Community (2026)
Transfer Tax is set by each autonomous community. The figures below show the general rate for most residential resale purchases.
🏙️ Madrid
6% — flat rate, one of the lowest in Spain
🌴 Canary Islands
6.5% — flat rate
☀️ Andalusia
7% — flat rate (Marbella, Málaga, Seville)
🏛️ Murcia
8% — flat rate
🏖️ Valencia
10% — flat rate (Alicante, Costa Blanca)
🏛️ Catalonia
10% — flat rate (Barcelona, Costa Brava)
🌊 Balearic Islands
8–13% — tiered scale (Mallorca, Ibiza, Menorca)
🌳 Castilla-La Mancha
9% — flat rate
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Balearic Islands tiered scale: 8% on first €400,000 · 9% on €400k–€600k · 10% on €600k–€1M · 12% on €1M–€2M · 13% above €2M. For a €1,500,000 property in Mallorca or Ibiza, ITP exceeds €130,000. See our full ITP guide for detailed calculations.
Ongoing Taxes After Purchasing Property in Spain
Buying property in Spain creates annual tax obligations that continue for as long as you own it. Non-residents have three main obligations:
Non-Resident Income Tax (IRNR)
If you are not a Spanish tax resident, you must file an annual IRNR return regardless of whether you rent the property or use it yourself.
Situation
EU/EEA Residents
Non-EU Residents
Property rented out
19% on net rental income (deductions allowed)
24% on gross rental income (no deductions)
Property unoccupied or owner-used
19% on imputed income (1.1–2% of cadastral value)
24% on imputed income
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Double taxation treaties: Spain has treaties with over 90 countries including the UK, Germany, France and the USA. Tax paid in Spain on rental income can typically be offset against your domestic tax liability. A Spanish tax advisor reviews your specific situation.
IBI — Annual Municipal Property Tax
IBI (Impuesto sobre Bienes Inmuebles) is Spain’s council tax equivalent, levied annually by the local municipality at 0.4% to 1.1% of the cadastral value — usually well below market value. On a cadastral value of €200,000 expect €800–€2,200 per year depending on the municipality.
Wealth Tax
Applies to individuals whose net Spanish assets exceed €700,000. Rates vary by region from 0.2% to 3.5%. Madrid residents benefit from a 100% bonus effectively eliminating the tax — though the national Solidarity Tax applies to fortunes above €3,000,000. Essential planning for high-value purchases in Marbella, Mallorca, Ibiza or Barcelona. Read our full Wealth Tax Spain guide.
Other Purchase Costs to Budget For
Beyond taxes, several professional fees are unavoidable costs of buying property in Spain:
Cost
Typical Amount
Notes
Legal fees
1–1.5% of purchase price
The most critical spend — protects your entire investment
Notary fees
€600–€1,200
Regulated by law; scales with property value
Land Registry fees
€400–€600
Essential — without registration ownership is not enforceable
Mortgage valuation (tasación)
€250–€600
Required by bank if using a mortgage
Translation / interpretation
€200–€500
Recommended for non-Spanish speakers at notary
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Budget rule of thumb: Add 10–15% on top of the agreed purchase price to cover all taxes, fees, and professional costs. On a €500,000 property, budget an extra €50,000–€75,000. On a €1,000,000 Balearic property, that figure can exceed €150,000.
Why You Need a Property Lawyer and Tax Advisor
Buying property in a foreign country is one of the most complex financial transactions most people undertake. The consequences of getting it wrong — undeclared debts, illegal builds, planning violations, missed tax deadlines — can be severe and costly to rectify.
Verifies the property is free of debts, charges, and planning violations before you commit any funds
Checks the seller has legal title and the property is correctly registered
Obtains and reviews the nota simple and cadastral certificate
FAQ — Taxes on Spanish Property for Foreign Buyers
Budget 10–15% on top of the purchase price. For a resale property: ITP at 6–13%, notary fees, Land Registry fees, and legal costs. For a new build: VAT at 10% plus Stamp Duty (AJD) at 0.5–1.5%. The Balearic Islands are the most expensive region — ITP alone on a €1,000,000 Mallorca property is approximately €88,000.
ITP (Transfer Tax) applies to resale properties at 6–13% depending on the region. VAT (IVA) applies to new-build properties directly from a developer at 10% (4% for protected housing). These taxes are mutually exclusive — you never pay both on the same purchase deed.
Yes. An NIE is mandatory for all foreign nationals signing contracts, paying taxes, and opening a Spanish bank account in Spain. You cannot complete a property purchase without one. Applications can take several weeks — apply as early as possible. Your property lawyer can apply on your behalf.
Three potential annual obligations: IBI (municipal property tax at 0.4–1.1% of cadastral value), IRNR (Non-Resident Income Tax on rental income at 19% for EU residents or 24% for non-EU, or on imputed income if the property is unoccupied), and Wealth Tax if your total net Spanish assets exceed €700,000.
Purchase taxes are identical for residents and non-residents. However, non-residents pay higher rates on rental income — particularly non-EU nationals (24% gross vs 19% net for EU residents). Residents may also access better mortgage terms and certain regional reliefs not available to non-residents.
In most cases yes. Spain has double taxation treaties with over 90 countries including the UK, Germany, France, the Netherlands and the USA. Tax paid in Spain on rental income can typically be offset against your domestic liability. A qualified Spanish tax advisor should review your specific situation before you complete.
No. Property ownership does not automatically grant residency. Spain’s Golden Visa programme — which granted residency to non-EU nationals investing €500,000 or more in real estate — was closed to new applications in April 2025. Other residency routes such as the non-lucrative visa or digital nomad visa remain available and do not require property ownership.
From offer accepted to notary signing, typically 6–12 weeks — longer if a mortgage is required. Your property lawyer manages the entire timeline, conducts due diligence, coordinates with the notary, and ensures all taxes are paid correctly and on time.
Legal disclaimer: This guide is for general informational purposes only and does not constitute legal or tax advice. Tax rates and regulations change frequently and vary by autonomous region. Always consult a qualified Spanish property lawyer and tax advisor before making any purchase decision. Property-Lawyers.com connects buyers with legal professionals but does not itself provide legal advice.
PL
Property-Lawyers.com Editorial Team
Spanish Real Estate Legal Specialists · Updated May 2026
Our editorial team collaborates with vetted English-speaking property lawyers and tax advisors across Spain to produce accurate, up-to-date legal guides for international buyers. All content is reviewed by qualified legal professionals with active practices in the Spanish real estate market.
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