At a glance
Key facts
Figures reviewed:
- FBAR threshold
- USD 10,000 aggregate foreign accounts
- Spanish non-resident income tax
- 19% for EU/EEA, 24% otherwiseApplied to rental income or imputed income on second homes
- Spanish IBI (local rates)
- Typically 0.4%–1.1% of cadastral value
- Treaty in force
- Spain–US double taxation treaty, as amended
Indicative figures for guidance only, correct as at August 2026. Rates, costs and timelines vary by lender, borrower profile, asset and jurisdiction, and are not an offer of finance. How we derive these figures.
Methodology and assumptions
- Figures are compiled by Clifton International specialists from live lender term sheets, indicative quotes and completed transactions arranged over the preceding 12 months.
- Rates and costs are stated as ranges rather than a single number because pricing is set case-by-case on borrower profile, residency, asset type, location and loan-to-value.
- Timelines assume a complete document file from the outset; valuation, legal capacity and (in Spain) NIE and notary availability drive the critical path.
- Costs exclude any lender, broker or third-party fees not stated on the page, and exclude currency movement between agreement and drawdown.
- Figures are reviewed at least quarterly and re-checked against lender pricing whenever a material market change occurs.
Last reviewed . Read the full Key facts methodology, or speak to our team for a quote based on your circumstances.
Do Americans have to report Spanish property to the IRS?
The property itself, if held directly in your own name, is generally not a reportable foreign financial asset. But Spanish bank accounts connected to the purchase or mortgage can require an FBAR filing, rental income is reportable on your US return, and holding through a foreign entity adds further reporting obligations.
- FBAR applies where aggregate foreign account balances exceed USD 10,000 at any point in the year.
- Spanish rental income is taxable in Spain and reportable in the US, with a foreign tax credit typically available.
- Spain also levies non-resident taxes on second homes even when they are not let.
- Ownership through a company or trust changes the analysis materially.
Key takeaways
- US citizens and green card holders report worldwide income regardless of residence, so Spanish rental income is reportable in both countries.
- A Spanish bank account used for the purchase or mortgage can trigger FBAR reporting once combined foreign account balances exceed the threshold.
- Directly held foreign real estate is generally not itself an FBAR or Form 8938 asset — the accounts and entities around it often are.
- The Spain–US double tax treaty and foreign tax credits are designed to prevent the same income being taxed twice, but only if both returns are filed correctly.
- Owning through a foreign company can create significant additional US reporting; take US tax advice before choosing a structure.
What Spain charges a US owner
- On purchase: transfer tax or VAT plus stamp duty, notary and registry — usually 10%–14% of price all-in.
- Annually: IBI local property tax, plus non-resident income tax on either actual rental income or an imputed income if the property is not let.
- On letting: Spanish tax on the rental profit, filed quarterly, at 24% for non-EU residents without the deduction of expenses available to EU residents.
- On sale: Spanish capital gains tax, with a 3% retention withheld from the sale price by the buyer and paid to the Spanish authorities on account.
What the US side looks like
Spanish rental income goes on your US return, converted to dollars. Spanish tax paid on that income is generally creditable against the US liability, so the practical outcome is usually that you pay the higher of the two rates rather than both in full. Depreciation and expense rules differ from Spain's, so the taxable figure will rarely be identical in both countries.
On sale, the US taxes the gain in dollars — which means currency movement between purchase and sale is part of the US gain even if the euro gain is small. This catches out buyers who purchased when the euro was materially cheaper or dearer.
How this affects the mortgage
Spanish lenders assessing a US applicant will ask for federal tax returns, usually two years, plus W-2s or 1099s, recent pay statements and US bank statements. Because those documents look unfamiliar to a Spanish credit team, files are more likely to stall on presentation than on affordability. Complete, translated and consistently formatted documentation is the single biggest factor in a US file completing on time.
A euro-denominated mortgage also creates a currency mismatch against dollar income. Lenders will apply a haircut to converted income, and some will limit loan-to-value for that reason.
Structuring: a warning worth reading twice
Holding Spanish property through a non-US company can produce controlled foreign corporation or passive foreign investment company reporting, with punitive treatment if it is missed. Some European advisers recommend corporate ownership as standard; for US persons that advice is often wrong. Take US tax advice on the structure before you sign anything, not after.
Currency quote
Get a no-obligation USD to EUR quote
Dollar buyers routinely lose 3–4% to their bank on the conversion into euros. Tell us roughly what you plan to transfer and a currency specialist will come back with indicative rates — no obligation.
Frequently asked
Questions from readers
Does buying Spanish property require an FBAR filing?
Not by itself. FBAR is triggered by foreign financial accounts, so it typically arises when you open a Spanish bank account for the purchase, running costs or mortgage and the aggregate balance of your foreign accounts exceeds USD 10,000 at any point in the year.
Will I pay tax twice on Spanish rental income?
Generally no. Spain taxes the income at source and the US allows a foreign tax credit for the Spanish tax paid, so in most cases you effectively pay the higher of the two rates rather than both.
Do I need a Spanish NIE as a US citizen?
Yes. An NIE is required to buy, to hold a mortgage and to pay Spanish taxes. Applications can be made through the Spanish consulate in the US or in Spain, and this is often the longest lead-time item in a purchase.
Is mortgage interest on a Spanish property deductible in the US?
It can be, where the property qualifies as a first or second residence and you itemise, subject to the usual US limits. Where the property is let, interest is generally deductible against the rental income under the rental rules. Confirm with your US tax adviser.
Should I own Spanish property through an LLC?
Rarely straightforward. A US LLC holding Spanish property can be treated very differently by the two tax systems, and Spanish lenders will lend less to a corporate borrower. Take joint US and Spanish advice before deciding.