Ask a lawyer in Madrid what tax you'll pay on a Spanish home and you'll get a different answer than in Valencia. Not because one of them is wrong. Spain hands its property transfer tax to the regions — and the regions have used that power enthusiastically. The same €300,000 apartment can carry a tax bill of €18,000 in one autonomous community and €30,000 in another.
That regional split runs through this whole guide. Below is what you'll pay at each stage of owning Spanish property: buying, holding, renting out and selling. If you're still working out how the purchase itself unfolds, start with our step-by-step guide to buying property in Spain and come back here for the numbers.
Why the region matters more than the house
Spain has 17 autonomous communities, and most of the taxes in this article are either set or adjusted by them. Transfer tax, stamp duty, wealth tax relief: all regional. The national government sets defaults; the communities override them. So before you compare two properties, compare their regions. A buyer weighing Alicante against Málaga is also weighing two different tax codes, and most buyers never realise it.
Taxes when you buy
The first fork in the road: is the property a resale or a new build? The two are taxed under separate systems, and you never pay both.
Resale homes pay ITP
ITP (Impuesto de Transmisiones Patrimoniales) is the transfer tax on second-hand property, and it's the tax regional governments adjust most often. Rates commonly land between 6% and 10% of the price. At the time of writing, Madrid charges 6%, Andalusia a flat 7%, while Valencia and Catalonia sit at 10%. The Canary Islands stay cheaper at 6.5%. The Balearics use a tiered scale that starts at 8% and climbs past 10% on expensive homes.
One trap. Since 2022, ITP is charged on the cadastre's official reference value (valor de referencia) whenever that figure is higher than the price you actually paid, so a genuine bargain can still produce a full-price tax bill. And the deadline is short: ITP falls due within about 30 working days of signing. Your lawyer or gestoría files it, but the responsibility stays yours.
New builds pay IVA plus AJD
Buy from a developer and ITP disappears. Instead you pay IVA, Spanish VAT, at 10% of the price, the same rate across the mainland and the Balearics. The Canary Islands don't charge IVA at all; their local equivalent, IGIC, runs at roughly 7% on new homes, which is one reason new-build buyers look hard at Tenerife and Gran Canaria.
New builds also trigger AJD, the stamp duty on notarised deeds. Regional again: between 0.5% and 1.5% of the price, with most higher-tax communities charging the full 1.5%. Small next to IVA, but on a €300,000 purchase it's still €4,500 you need in cash on completion day.
What the full bill looks like
Taxes aren't the whole story. Notary fees, land registry fees, a gestoría to handle the filings and an independent lawyer at around 1% of the price all stack on top. Budget 10–15% above the purchase price and you won't be caught short. Spain sits mid-table internationally; you can see how it compares in our breakdown of the true cost of buying property abroad.
Worked example: €300,000 resale vs new build
Take a region with an 8% ITP rate and 1.5% AJD, roughly the middle of the Spanish range, and put the same €300,000 into a resale and a new build.
The resale:
- ITP at 8%: €24,000
- Notary and land registry: around €1,500
- Independent lawyer at 1%: €3,000
- Total on top of the price: roughly €28,500, or 9.5%
The new build:
- IVA at 10%: €30,000
- AJD at 1.5%: €4,500
- Notary, registry and lawyer: around €4,500
- Total on top of the price: roughly €39,000, or 13%
Same budget, about €10,000 apart. Now move regions instead of changing the property. That resale in Madrid at 6% ITP costs €18,000 in tax; in Valencia at 10% it costs €30,000, exactly what the new build pays in IVA. The house didn't change. The bill did.
Taxes while you own it
IBI, the annual municipal tax
Every owner pays IBI (Impuesto sobre Bienes Inmuebles) to the town hall each year. It's calculated on the cadastral value, an administrative figure that usually sits far below market price, at a rate each municipality picks for itself. A typical two-bedroom coastal apartment might owe a few hundred euros a year; large villas in prime municipalities can pass €1,000. Many town halls also bill a small separate charge for rubbish collection, the basura. Neither will ruin you. Ignoring them can, slowly, because unpaid IBI attaches to the property itself and surfaces at the worst possible moment, usually when you try to sell.
The tax non-residents forget: imputed income
Here's the one that catches almost every foreign owner. If you're a non-resident and your Spanish home isn't rented out, Spain taxes you anyway on a notional imputed income, on the theory that you could have rented it. The base is 1.1% or 2% of the cadastral value, depending on when your municipality last revised its values; on that base you pay 19% if you live in the EU or EEA and 24% otherwise. In money terms it's usually modest, often €200–600 a year. But it's a filing obligation, Modelo 210, and nobody sends you a bill. No letter arrives. You're simply expected to file, and back taxes plus interest wait patiently for owners who learn about it five years in.
Wealth tax, briefly
Spain still has a wealth tax, and non-residents are in scope for their Spanish assets. In practice a single holiday home rarely triggers it: allowances are generous and several communities have hollowed the tax out with regional relief. It becomes real above roughly a million euros of Spanish assets, and the thresholds and reliefs vary by region, like everything else here. At that level, take advice before you buy rather than after. Ownership structure can't be fixed retroactively.
Taxes when you rent it out
Rental income from Spanish property is taxed in Spain even if you live elsewhere, and the rules split sharply by where you live. EU and EEA residents pay 19% on the net: mortgage interest, IBI, insurance, community fees, repairs and depreciation all come off first, which often halves the taxable base. Residents of everywhere else, the UK and US included, pay 24% on the gross rent. No deductions at all.
Run the numbers on what that means. €12,000 a year in rent with €5,000 of costs leaves an EU landlord paying 19% of €7,000, about €1,330. A British landlord with the identical flat and identical costs pays 24% of the full €12,000: that's €2,880, more than double for the same property. This is the single biggest tax gap between EU and non-EU owners, and it belongs in your yield calculations before you buy, not after the first tenant moves in.
Taxes when you sell
Capital gains and the 3% retention
Sell at a profit and Spain taxes the gain at 19% for non-residents; residents pay on a progressive scale. Purchase costs and documented renovations raise your acquisition value and shrink the taxable gain, so keep every invoice from day one.
The mechanism that surprises people is the retention. When a non-resident sells, the buyer must by law withhold 3% of the price and pay it straight to the tax office. You receive 97% at the notary. That 3% is an advance on your capital gains bill: you file Modelo 210 within four months, settle any difference, or reclaim the excess if your actual liability comes to less. Refunds do arrive, but on the tax office's timetable, and sellers commonly wait the better part of a year.
Plusvalía municipal
On top of capital gains tax, the town hall charges plusvalía, a tax on the increase in the land's value while you owned it. A 2021 court ruling reshaped it: you can now choose between two calculation methods, and you pay nothing if you sold at a genuine loss. On many ordinary sales, though, it's a four-figure amount, sized by the municipality and your years of ownership. Plenty of sellers first hear the word at completion.
One quirk worth knowing. The seller owes plusvalía, but when the seller is non-resident the buyer can be held liable for it. If you're buying from a non-resident, a good lawyer retains the estimated amount from the price at completion and settles it directly.
Know the region, then pick the house
None of this should put you off. Spanish property taxes are knowable and mostly predictable once you've mapped your region: check the autonomous community first, budget 10–15% over the price when buying, file the imputed income return every year you own, and expect the 3% retention when you sell. When you're ready to look at actual homes, browse HomeNSearch's property listings in Spain, where you can compare the regions these rates apply to before you fall for a specific address.
Frequently asked questions
Do foreigners pay higher purchase taxes in Spain?
No. ITP, IVA and AJD are identical for everyone regardless of nationality or residence. The differences appear later: the imputed income filing, gross-rent taxation for non-EU landlords, and the 3% retention on sale all target non-residents. The purchase itself treats every buyer the same.
Which Spanish regions have the lowest purchase tax?
At the time of writing, Madrid at 6% and the Canary Islands at 6.5% sit at the bottom of the ITP range, with Andalusia close behind at a flat 7%. Valencia, Catalonia and the upper Balearic bands reach 10% or more. Rates shift with regional politics, so confirm the current figure for your target region before you commit.
Is a new build or a resale cheaper on tax in Spain?
Usually the resale. New builds carry 10% IVA plus AJD everywhere, while resale ITP starts as low as 6%. In a 10% ITP region the gap narrows to little more than the stamp duty. The Canaries are the exception where new builds close the distance, since IGIC at roughly 7% undercuts mainland IVA.
What if I never filed the non-resident imputed income return?
The obligation doesn't lapse just because nobody contacted you. The tax office can claim the last four years, with interest and possible surcharges on top. Owners usually regularise by filing the missed returns voluntarily, which keeps penalties down. If you've owned for years and never heard of Modelo 210, talk to a Spanish tax adviser before selling, because that's when it tends to surface.