Non-resident property ownership in Spain comes with a clearly defined set of tax obligations — at purchase, during ownership, and on eventual sale. Many foreign buyers focus exclusively on the purchase price and overlook the recurring tax burden that continues for as long as they own the property. This guide covers all the main tax categories a non-resident buyer faces, with the rates currently applicable in the Comunidad Valenciana (Alicante province).
Tax rates and allowable deductions depend on your country of residence and applicable double-taxation treaties. The figures here are general reference points; specific advice for your situation requires a qualified Spanish tax adviser.
At Purchase: Transfer Tax vs VAT
The tax you pay when buying property in Spain depends on one critical distinction: whether you are buying a new-build (first transmission) or a resale (second or subsequent transmission). These two categories are taxed under entirely different regimes.
New-Build Property: IVA + AJD
When buying a new-build property directly from a developer, the transaction is subject to:
IVA (Impuesto sobre el Valor Añadido, VAT):
- 10% of the purchase price for standard residential properties
- 4% for officially protected social housing (vivienda de protección oficial) — not relevant for typical market purchases on the Costa Blanca
IVA is charged by the developer (who is a business entity) and paid directly at completion. It appears as a line item in the notarial deed.
AJD (Actos Jurídicos Documentados, Stamp Duty):
- 1.5% of the purchase price in the Comunidad Valenciana (Alicante and Valencia provinces)
- AJD applies to the notarial deed itself — it is a tax on the legal documentation of the transaction, not on the underlying transfer
Total tax burden for new-build in Alicante province: approximately 11.5%
This is paid at or shortly after the escritura (notarial completion). IVA is paid to the developer as part of the purchase price; AJD is paid to the Comunidad Valenciana tax authority.
Resale Property: ITP
When buying a resale property (from an individual seller, not a developer selling their own development), the transaction is subject to:
ITP (Impuesto sobre Transmisiones Patrimoniales, Property Transfer Tax):
- 10% of the purchase price in the Comunidad Valenciana
- AJD is not additionally payable on resale transactions where ITP applies
ITP is the buyer’s liability, paid to the regional tax authority (Comunitat Valenciana) within 30 working days of the escritura date.
Total tax burden for resale in Alicante province: approximately 10%
A note on declared value: ITP is calculated on the higher of the precio de compraventa (purchase price stated in the deed) and the valor de referencia (reference value determined by the Catastro/cadastral authority). Since 2022, the reference value (valor de referencia catastral) has become the minimum taxable base for ITP and inheritance/gift tax. If you purchase below the reference value, ITP will still be calculated on the reference value. Your solicitor should verify this before the purchase.
Budget for Total Acquisition Cost
Beyond the purchase taxes above, budget for:
| Cost | Typical Range |
|---|---|
| Notary fees | 0.2–0.5% of deed value |
| Land Registry fees | 0.1–0.3% of deed value |
| Solicitor / abogado | 0.5–1% of purchase price |
| Property survey (if desired) | €300–€800 |
Rule of thumb for total acquisition cost: Budget 12–15% on top of the purchase price to cover all taxes, notary, registry, and legal fees.
During Ownership: Annual Property Taxes
Non-residents owning Spanish property face two categories of recurring annual taxes: municipal and state.
IBI — Municipal Property Tax (Impuesto sobre Bienes Inmuebles)
IBI is the primary annual municipal property tax, set by each municipality. It is calculated as a percentage of the valor catastral (cadastral value), which is an official government-assessed value that typically runs below market value.
The IBI rate varies by municipality: urban properties typically attract rates between 0.4% and 1.1% of the cadastral value. For a two-bedroom apartment in Alicante city, IBI typically runs €400–€900 per year, though it varies materially by area and property size.
IBI is due regardless of whether the property is rented or vacant. It is the owner’s liability — if you purchase a property with outstanding IBI arrears, those debts transfer to you under Spanish law. Your solicitor should verify there are no outstanding IBI charges as part of pre-purchase due diligence.
IBI bills are typically issued once per year, between September and November, though the municipality can set its own calendar. Non-residents most commonly pay via direct debit from a Spanish bank account or through a Spanish gestor (fiscal representative/tax administrator).
Tasa de Basuras (Waste Collection Tax)
The tasa de basuras (or tasa municipal de residuos) is a small municipal charge for waste collection and environmental services. It is distinct from IBI but collected by the same municipality. Annual cost for a standard apartment in Alicante province is typically €80–€200. It may be collected jointly with IBI or separately depending on the municipality.
IRNR — Non-Resident Income Tax (Impuesto sobre la Renta de No Residentes)
IRNR is the state tax that applies to all non-resident property owners in Spain. The treatment differs based on whether you rent the property or leave it vacant.
Vacant Property: Imputed Income Tax
If you own a property in Spain but do not rent it out, you are still liable for IRNR on a notional imputed income. The Spanish state assumes you derive a benefit from owning property in Spain, even if you do not rent it, and taxes this notional benefit.
The imputed income base is calculated as:
- 1.1% of the valor catastral for properties whose cadastral value was reviewed since 1 January 1994
- 2% of the valor catastral for properties with older valuations
The IRNR tax rate on this imputed income is:
- 19% for residents of EU member states, EEA countries (Norway, Iceland, Liechtenstein), and countries with which Spain has a tax treaty with an appropriate exchange-of-information clause
- 24% for all other non-residents
Practical example: A property with a valor catastral of €80,000, owned by an EU resident:
- Imputed income: €80,000 × 1.1% = €880
- IRNR due: €880 × 19% = €167.20 per year
For a non-EU/EEA owner: €880 × 24% = €211.20 per year.
The cash cost of imputed IRNR is typically modest — €100–€500 for a standard apartment, depending on cadastral value and residency. It is, however, a formal legal obligation that must be filed using Modelo 210 annually (deadline: 31 December of the following year for the prior calendar year). Non-filing attracts penalties.
Rental Income: IRNR on Actual Income
If you rent out your Spanish property — long-term residential or short-term tourist letting — the rental income is subject to IRNR:
EU/EEA residents:
- Tax rate: 19% on net income (after allowable deductions)
- Deductible expenses include: mortgage interest, IBI, community fees, insurance, depreciation (3% of construction value), management fees, maintenance and repair costs
- Filed quarterly using Modelo 210 (quarterly filing for rental income; quarterly deadlines: Q1 → April, Q2 → July, Q3 → October, Q4 → January following year)
Non-EU/EEA residents:
- Tax rate: 24% on gross income — no expense deductions are permitted
- This is a significant disadvantage: the full 24% is applied to every euro of rental income received, before any costs
- Same quarterly filing requirement using Modelo 210
Practical example: A non-EU/EEA owner earning €12,000 per year in gross rent:
- IRNR at 24% on gross: €2,880 in tax per year
- There are no deductions — management fees, IBI, comunidad costs are paid separately without tax relief
An EU resident earning the same €12,000, with €4,000 in allowable deductions:
- Net income: €8,000
- IRNR at 19%: €1,520 in tax per year
The residency distinction creates a meaningful difference in after-tax rental yield. Investors from countries without EU/EEA status should model IRNR at the 24% gross rate as a base case.
Double-taxation treaties: Spain has double-taxation agreements with many countries, including the UK, Russia, Germany, France, and others. These treaties may provide relief from double taxation but generally do not reduce the Spanish IRNR rate itself — they allocate taxing rights and prevent the same income being taxed in full in both countries. Advice specific to your residency situation is important.
On Sale: Plusvalía Municipal and Capital Gains
When you sell a Spanish property, two taxes may apply: the plusvalía municipal and Spanish capital gains tax under IRNR.
Plusvalía Municipal (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana, IIVTNU)
The plusvalía municipal is a municipal tax charged on the theoretical increase in value of the land (not the building) since the last transfer. It is calculated by the municipality using cadastral land values and set rates applied to the number of years of ownership — not on your actual gain.
Who pays: The seller normally pays the plusvalía, but for resale transactions where the seller is a non-resident or a private individual, Spanish law allows this to be negotiated. In practice, it is often the seller’s liability.
After a 2021 Constitutional Court ruling and subsequent legislative reform, the plusvalía calculation now uses one of two methods: the traditional método objetivo (based on cadastral value and years of ownership) or a new método real (based on actual land value increase). Taxpayers can choose whichever method results in a lower tax.
Importantly, if you sell at a loss (the sale price is lower than the acquisition cost), the plusvalía is not payable under the reformed rules.
The amount varies significantly by municipality and years of ownership. For a property held ten years in Alicante city, plusvalía might range from €1,500 to €8,000 depending on the size and location of the property — but this varies considerably. Your abogado or gestor will calculate the exact amount based on the specific property’s cadastral data.
Capital Gains Tax (IRNR on Gains from Property Sale)
When a non-resident sells Spanish property, the gain is subject to IRNR:
Rate:
- 19% for EU/EEA residents (same rate as for resident sellers under IRPF, due to EU non-discrimination rules)
- 19% for non-EU/EEA residents since 2015, when Spain was required to equalise rates to comply with EU freedom of capital movement principles
Taxable gain calculation:
- Gain = Sale price (net of selling costs: agent fees, notary, capital gains taxes paid) minus acquisition cost (purchase price plus all purchase taxes, notary, registry, legal fees, and improvement works with receipts)
- You can offset allowable purchase costs against the gain
Retention mechanism (retención): In transactions where the seller is a non-resident, the buyer is legally required to retain 3% of the purchase price and pay it to the Spanish tax authority (AEAT) on the seller’s behalf at completion. This is not an additional tax — it is a prepayment on account of the seller’s capital gains tax liability. If the actual capital gains tax is less than the retained 3%, the seller can reclaim the difference from the AEAT.
This retention is important to know if you are buying from a non-resident seller: you must apply the 3% retention or you become personally liable for the seller’s tax.
Summary Table
| Tax | When | Who Pays | Rate (Comunitat Valenciana / Spain) |
|---|---|---|---|
| IVA | At purchase (new-build only) | Buyer | 10% of purchase price |
| AJD | At purchase (new-build) | Buyer | 1.5% of purchase price |
| ITP | At purchase (resale only) | Buyer | 10% of purchase price |
| IBI | Annually | Owner | ~0.4–1.1% of cadastral value |
| Basuras | Annually | Owner | €80–€200 flat / year |
| IRNR (imputed) | Annually (vacant property) | Owner | 19% (EU/EEA) or 24% on 1.1–2% of cadastral value |
| IRNR (rental) | Quarterly | Owner | 19% on net (EU/EEA) or 24% on gross (non-EU/EEA) |
| Plusvalía | On sale | Seller (typically) | Variable by municipality / years held |
| Capital gains (IRNR) | On sale | Seller | 19% on gain |
Working with a Spanish Tax Administrator (Gestor)
The practical management of non-resident property taxes in Spain is typically handled by a gestor — a qualified fiscal administrator who files returns and handles tax authority correspondence on your behalf. Services typically include:
- Annual IRNR filing (Modelo 210) for imputed or rental income
- IBI direct debit management
- IRNR quarterly filings for rental income
- Capital gains calculation and filing on sale
Annual cost for a standard IRNR filing engagement: typically €100–€250 per year. For rental income with multiple quarterly filings and expense documentation, €300–€500 is more common. The cost is deductible for EU/EEA owners against rental income.
If you own property in Spain without filing IRNR, you are not in compliance with Spanish tax law regardless of the amount owed. Tax authority investigations can go back four years; penalties are applied to the unpaid tax plus interest.
Reading This Alongside Other Guides
The tax framework described here is one part of the full picture of owning Spanish property as a non-resident. For the complete purchase process — including NIE requirements, contracts, and timelines — see our guide to buying property in Spain as a foreigner.
For investors considering rental returns, the tax costs described here are among the most significant factors in calculating net yield. See our guide to rental yields in Spain for how these costs interact with gross income.
Inversa Development develops new-build residential properties on the Costa Blanca and offers structured co-investment products for qualified investors. Both buying and investing in Spain involve navigating the tax framework described here, which is why we encourage all prospective buyers and investors to engage independent legal and tax advisers early in their process.
Legal disclaimer: This article is informational only and does not constitute legal, financial, or tax advice. Tax rates, allowances, and procedures are subject to change by Spanish and regional authorities. The information in this article reflects general rules as understood at the time of publication; individual tax obligations depend on your country of residence, applicable double-taxation treaties, personal circumstances, and the specific property. Consult a qualified Spanish abogado and asesor fiscal (tax adviser) for advice on your specific situation before making any property purchase or investment decision. Investment products offered by Inversa Development (Makarov e Hijos, Sociedad Cooperativa, CIF F42521534) are structured as bilateral private agreements and do not constitute a public offering under Ley del Mercado de Valores (LMV).