What taxes do non-residents pay on Spanish property?
Non-residents pay tax at four points: on purchase (ITP transfer tax or 10% VAT plus AJD), annually (IBI plus non-resident income tax, and wealth tax above thresholds), on rental income (IRNR at 19% for EU/EEA or 24% otherwise) and on sale (capital gains plus municipal Plusvalía).
- ITP rates vary by autonomous community, typically 6–10%.
- A 3% retention is withheld from non-resident sellers at completion.
- EU/EEA owners can deduct expenses against rental income; others often cannot.
- An annual IRNR return is due even if the property is not let.
Key takeaways
- On purchase: 6–10% ITP (resale) or 10% IVA + 1.2–1.5% AJD (new-build).
- Annually: IBI (council tax), non-resident income tax (IRNR) and, above €700k, wealth tax.
- Rental income: 19% flat rate on net income for EU/EEA residents, 24% on gross for non-EEA (incl. UK).
- On sale: 19% CGT plus municipal Plusvalía on the land-value uplift.
- 3% retention: buyers withhold 3% of the price from non-resident sellers as a CGT prepayment.
Taxes on purchase
The one-off taxes that apply when you buy:
- Resale — ITP (transfer tax): 6–10% depending on region (Madrid 6%, Andalucía 7%, Balearics 8–13% sliding, Catalonia/Valencia 10%).
- New-build — IVA + AJD: 10% VAT plus 1.2–1.5% stamp duty.
For the full purchase-cost breakdown see our cost of buying property guide.
IBI — annual council tax
IBI (Impuesto sobre Bienes Inmuebles) is the municipal property tax, charged annually by the town hall. It is calculated on the cadastral value (valor catastral), which is usually well below market value. Typical IBI runs 0.4–1.1% of the cadastral value — often €400– €2,500 per year for a mid-priced Costa property. Set up direct debit with your Spanish bank to avoid missed payments.
IRNR — non-resident income tax (imputed rental)
Even if you never rent the property, the Spanish tax authority (Agencia Tributaria) imputes a notional rental income equal to 1.1% or 2% of the cadastral value (1.1% if the valuation has been updated in the last 10 years, otherwise 2%).
You pay tax on this imputed amount at the non-resident rate — 19% for EU/EEA residents, 24% for non-EEA including UK post-Brexit. For most non-resident owners this works out to €200–€1,500 per year, declared annually on Modelo 210.
Wealth tax (Impuesto sobre el Patrimonio)
Non-residents pay Spanish wealth tax on their Spanish assets only, with a €700,000 personal allowance. Rates are progressive from 0.2% to 3.5% depending on region — Madrid has a 100% bonificación (effectively 0%), while Catalonia and the Balearics apply the full scale.
A separate temporary "solidarity tax" for large fortunes (Impuesto de Solidaridad de las Grandes Fortunas) applies above €3m, though it typically offsets against regional wealth tax already paid. HNW purchasers should take specialist tax advice on structuring.
Tax on rental income
- EU/EEA residents: 19% on net rental income after deductible expenses (mortgage interest, IBI, community fees, agent fees, insurance, depreciation).
- Non-EEA (incl. UK post-Brexit): 24% on gross rental income with no deductions.
- Filed quarterly on Modelo 210. Late filing incurs penalties.
- Short-term holiday lets also require a regional tourist licence — see our holiday-let mortgage guide.
Taxes on sale
- CGT (Capital Gains Tax): 19% on the gain (sale price less indexed acquisition cost including purchase taxes and capital improvements).
- 3% retention: the buyer withholds 3% of the sale price and pays it directly to Hacienda as a CGT prepayment. Refundable if CGT owed is lower.
- Plusvalía Municipal: town-hall tax on the increase in land value during your ownership period — calculation methodology reformed in 2021; some sales owe nothing.
Reinvestment relief on your habitual residence is available only to Spanish tax residents — non-residents pay CGT in full.
UK-Spain double taxation treaty
The UK-Spain double taxation treaty (2013) prevents you being taxed twice on the same income or gain. Spanish tax paid on rental income or CGT is offset against your UK liability under HMRC's foreign tax credit rules. Your UK accountant should be aware of your Spanish declarations — the two systems are joined up.
Staying compliant — the fiscal representative
Most non-resident owners appoint a fiscal representative (representante fiscal) — a Spanish gestoría or lawyer — to file Modelo 210 annually, receive tax correspondence and handle IBI direct debits. Cost is typically €150–€400 per year and is well spent given the penalty exposure for missed filings.
Frequently asked
Questions from readers
I don't rent my Spanish home — do I still owe income tax?
Yes. Non-residents pay IRNR on an imputed rental value even if the property is only used personally or left empty. It is small (typically €200–€1,500/year) but must be declared annually on Modelo 210.
Does wealth tax apply to my UK assets too?
No — as a non-resident you only pay Spanish wealth tax on Spanish-situs assets. UK assets are outside scope. The €700,000 personal allowance applies before any tax is due.
How does the 3% retention work when I sell?
The buyer's lawyer withholds 3% of the sale price at completion and pays it directly to the Agencia Tributaria as a prepayment against your CGT. If your actual CGT is lower, you file Modelo 210 to reclaim the difference.
Can I offset my UK mortgage interest against Spanish rental income?
Only if you are an EU/EEA resident (net-income basis with deductions). non-EU residents (including US, UAE and post-Brexit UK buyers) are taxed on gross rental income at 24% with no expense deductions in Spain — though UK tax relief may still apply under the treaty.
What happens if I don't file Modelo 210?
Penalties start at 50–150% of the tax owed, plus interest. More seriously, unpaid tax attaches to the property — a future sale can be held up until arrears are cleared. A fiscal representative is the simple solution.