What taxes do you pay as a property owner in Spain?

As a property owner in Spain you encounter a number of Spanish taxes — both ongoing and on sale. Here is the combined overview of what you pay, when and why.

IBI — the ongoing property tax

IBI (Impuesto sobre Bienes Inmuebles) is the municipal property tax paid every year, calculated on the property's cadastral value — not its market value. Typical amounts: 300-800 EUR/year for an apartment, 800-3,000 EUR for a villa, depending on municipality and size.

Imputed income tax for non-residents

This is where many buyers are surprised: as a non-resident owner who does NOT rent out the property, you still have to pay a "notional" rental income tax (imputación de rentas). The state assumes you "earn" 1.1-2% of the property's cadastral value per year and taxes that at 19% (for EU citizens). For a property with a cadastral value of 100,000 EUR, that is around 200-400 EUR/year in tax.

Tax on rental income (if you rent out)

If you rent out the property — short or long term — you pay 19% tax on net income as an EU citizen (non-resident). EU citizens can deduct actual expenses (management, maintenance, community fees, insurance, depreciation). Non-EU citizens cannot deduct expenses and pay 24% of gross rent.

Plusvalía — on sale

Plusvalía municipal is a municipal tax on the official increase in the land's cadastral value during the period of ownership. The amount varies from municipality to municipality and depends on the length of ownership — the longer, the higher the plusvalía. Paid by the seller.

Capital gains tax — on sale

As a non-resident you pay 19% of the profit (sale price minus purchase and improvement costs) in capital gains tax. Spanish authorities automatically withhold 3% of the sale amount as advance tax — any additional amount due or refund is settled afterwards.

Important detail: Double taxation agreements between most countries and Spain prevent full double taxation — you do not pay full tax twice, but your Spanish tax can affect your tax return at home. Always consult an accountant familiar with both countries' rules.

Wealth tax (Impuesto sobre el Patrimonio)

Spain has a wealth tax that varies from region to region. Some regions (Madrid, Andalusia) have effectively abolished it by offering a 100% bonificación, while others (Valencia, Catalonia) levy it. It typically only applies to wealth over 700,000 EUR per person, so it affects very few foreign buyers.

When do the Spanish taxes need to be filed?

IBI: Charged automatically by the municipality — set up a direct debit from your Spanish bank account
Imputed income tax: Declared and paid by the end of December for the previous year
Rental income: Declared quarterly
Capital gains on sale: Within 4 months of the sale being completed

Frequently asked questions about taxes in Spain

Do I have to pay tax in Spain even if I only use the property for holidays?

Yes — as a non-resident owner you pay the imputed income tax even if you do not rent out the property. It is not a large expense, but it surprises many the first time.

Can you avoid capital gains tax on sale?

As a non-resident you cannot avoid it, but you can minimise it by documenting all improvement costs over the period of ownership, since these are deducted from the profit. Keep all receipts for renovation and improvement expenses.

When should I consult a Spanish tax advisor?

At the latest before you buy — and again before you sell. These are two points where tax decisions have a major impact on your final outcome, and a gestor or accountant specialising in non-resident taxation is relatively cheap compared with the potential savings.