Property Taxes in Spain: What Foreign Owners Need to Know

Buying property in Spain is only the beginning of your financial relationship with the Spanish tax system. Foreign owners — even those who do not live in Spain — carry ongoing tax obligations that many are not fully aware of when they purchase. Here is a clear overview of what to expect.

Non-resident income tax (IRNR)

If you are not tax-resident in Spain, you are required to file an annual tax declaration on your Spanish property: the Impuesto sobre la Renta de No Residentes (IRNR).

This obligation applies even if you do not rent the property out. A deemed rental income is attributed to the property — calculated as 1.1% or 2% of the cadastral value (a government-assessed figure, typically lower than market value). EU citizens pay tax at 19% on this imputed amount.

In practice, this typically amounts to €200–€600 per year for most properties on the Costa del Sol. If you do rent the property, actual rental income is taxed instead of the imputed amount.

This declaration must be filed annually. Most non-resident owners use a local Spanish gestor (tax administrator) to handle it correctly — typically €100–€200 per year.

IBI — municipal property tax

IBI (Impuesto sobre Bienes Inmuebles) is Spain’s municipal property tax, paid once a year to the local council. The amount is based on the property’s cadastral value and varies significantly by municipality.

For an apartment worth €250,000 on the Costa del Sol, expect IBI of roughly €300–€700 per year. For a villa with a pool in an attractive location, it can reach €1,500–€2,500. Always check the IBI rate for the specific municipality before purchasing — your lawyer can obtain this figure easily.

Wealth tax

Spain applies a wealth tax to both residents and non-residents who hold significant assets in the country. For non-residents, the relevant base is typically the value of your Spanish property minus any outstanding mortgage. The applicable rate and thresholds vary by region.

Andalusia has made changes to this tax in recent years. Consult your lawyer or tax advisor to understand whether it applies to your situation.

Inheritance and succession

If you own property in Spain, your heirs will face Spanish inheritance tax on that asset — regardless of where they are based. Rates and exemptions vary significantly by region. Andalusia has relatively favourable treatment for close family members.

Planning in advance with proper legal advice can significantly reduce the inheritance tax burden on your estate.

Practical advice

Spanish property tax for non-residents involves overlapping obligations at national, regional, and municipal levels. The rules change periodically, and the penalties for late or incorrect filings are real.

Working with a local gestor or tax lawyer costs relatively little and provides genuine peace of mind. The cost is typically €100–€300 per year for a straightforward non-resident situation.

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