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Buying as a non-resident: the tax map
The taxes on a Spanish purchase are not complicated once they are laid out, but they are easy to underestimate. Here is the map, so the final number does not surprise you.
Carlos
Architect and Founder, DIEZ
What tax falls where
For a non-resident buyer, Spanish property tax splits cleanly into two stages: what you pay to acquire, and what you pay to hold and then sell. The acquisition cost is the one that shapes the budget, because it lands in full at completion and is rarely financeable. As a working figure, set aside 10 to 13 per cent of the purchase price for all costs combined, with transfer or value-added tax forming the bulk of that.
The single most consequential variable is whether you are buying a resale or a new build, because the two are taxed under entirely different regimes. A resale, meaning any home sold by a private owner after its first transfer, attracts transfer tax. A new build sold for the first time by the developer attracts value-added tax plus a stamp duty. The two never overlap, and the difference can move your total bill by a point or two of the price.
The price is the headline. The tax regime behind it is what actually sets your cheque at completion.
Andalusia, which includes Marbella and the wider Costa del Sol, sets its own rates for transfer tax and stamp duty, and these have been revised in recent years. The figures below are current working rates for the region. They are a planning guide, not a substitute for a confirmed calculation from your lawyer once the specific property and price are known.
Buying: resale versus new build
Resale: transfer tax (ITP)
On a resale, you pay Impuesto sobre Transmisiones Patrimoniales, the transfer tax, known as ITP. In Andalusia this currently runs at a flat 7 per cent of the declared purchase price. There is no separate stamp duty on a resale, because ITP and stamp duty are mutually exclusive. On a one million euro resale, that is seventy thousand euros in transfer tax alone, before notary, registry and legal fees.
One point catches buyers out: the tax authority can assess ITP on its own reference value for the property rather than on the price you paid, if its figure is higher. Where the official reference value exceeds the agreed price, the tax is calculated on the larger number. Your lawyer should check the reference value early, so there is no surprise after completion.
New build: VAT (IVA) plus stamp duty (AJD)
A new build bought from the developer is taxed differently. You pay IVA, the Spanish value-added tax, at 10 per cent of the price for residential property. On top of IVA you pay Actos Jurídicos Documentados, the stamp duty known as AJD, currently 1.2 per cent in Andalusia. The combined headline is therefore 11.2 per cent, modestly higher than the 7 per cent ITP on a resale.
Off-plan purchases follow the same logic, but IVA is charged on each staged payment as it falls due, not only at completion. Plots of land and commercial units can carry IVA at the standard 21 per cent rather than 10 per cent, so confirm the category of what you are buying. If you are weighing a new build against a resale at a similar price, the tax difference belongs in the comparison from the start.
The tax map at a glance
| Tax | Applies to | Rough cost |
|---|---|---|
| ITP (transfer tax) | Resale purchase | 7% of price (Andalusia) |
| IVA (VAT) | New build purchase | 10% of price (residential) |
| AJD (stamp duty) | New build purchase | 1.2% of price (Andalusia) |
| IBI (council tax) | Ownership, yearly | 0.4% to 1.1% of cadastral value |
| Non-resident income tax (IRNR) | Ownership, yearly | 19% to 24% on imputed or actual rental income |
| Capital gains tax | Sale | 19% on the gain (non-resident rate) |
| Buyer's 3% retention | Sale | 3% of price withheld against your gain |
| Plusvalia municipal | Sale | Set by town hall on land value uplift |
Read the table as two clusters. The first three lines are one-off acquisition taxes, only one of the first two applies to you depending on resale or new build. The remaining lines are the recurring and exit taxes that follow ownership, and they matter as much to a holding decision as the entry cost does.
Holding and selling
While you own
Every owner pays IBI, the annual council tax, calculated on the cadastral value rather than the market price, so it is usually a modest figure relative to the purchase. Separately, as a non-resident you owe non-resident income tax, IRNR, each year. If you let the property, you are taxed on the rental income; if you do not, Spain still imputes a notional income from the home and taxes it. EU and EEA residents are taxed at 19 per cent and can deduct expenses against rental income; other non-residents pay 24 per cent on gross income with no deductions.
- IBI: paid to the town hall annually, based on cadastral value.
- IRNR on actual rent if let, on imputed income if not.
- Rubbish collection and community fees, which are charges rather than taxes but recur the same way.
- Wealth tax can apply above regional thresholds; check whether your holding crosses them.
When you sell
On sale, two taxes meet. You pay capital gains tax on the difference between your acquisition cost and your sale price, at 19 per cent for non-residents, with eligible costs and taxes from the original purchase added to your base to reduce the gain. To secure this, the buyer is legally required to withhold 3 per cent of your sale price and pay it directly to the tax authority on your behalf. That retention is a payment on account: if your actual gains tax is lower, you reclaim the difference; if higher, you settle the balance.
Separately, the town hall levies plusvalia municipal, a tax on the increase in the land value, not the building, over your period of ownership. The seller normally pays it. Since recent reform you may calculate it on the real land gain or by the council's formula, whichever is lower, and where there is no land gain, no plusvalia is due.
- NIE
- Número de Identidad de Extranjero, the foreigner identity number every non-resident needs to buy, pay tax or open an account in Spain.
- Cadastral value
- The administrative value the state assigns to a property, used as the base for IBI and imputed income, usually well below market price.
- Fiscal representative
- A Spanish-resident person or firm appointed to handle your tax filings and correspondence with the authorities as a non-resident.
- Plusvalia municipal
- A local tax on the uplift in land value over the ownership period, levied by the town hall and normally borne by the seller.
Common questions
How much should I budget on top of the asking price?
Plan for 10 to 13 per cent of the price for all purchase costs combined. Tax is the largest line, at 7 per cent for a resale or 11.2 per cent for a new build in Andalusia, with notary, land registry and legal fees making up the rest. If you use a mortgage, add the lender's valuation and arrangement costs on top.
Is a new build really more expensive to buy than a resale, tax-wise?
On the headline rate, yes. A new build carries 10 per cent IVA plus 1.2 per cent AJD, against 7 per cent ITP on a resale in Andalusia. That said, the comparison should weigh the whole picture, since condition, warranty, energy performance and staged payments on off-plan all bear on the real cost of ownership.
What is the 3 per cent retention when I eventually sell?
When a non-resident sells, the buyer is required by law to withhold 3 per cent of the agreed price and pay it to the tax authority as an advance against your capital gains tax. It is not an extra tax, it is a payment on account. If your actual gain produces a lower bill, you file to reclaim the surplus; if higher, you pay the difference.
Do I owe Spanish tax even if I never rent the property out?
Yes. As a non-resident owner you are liable for non-resident income tax each year on a notional, imputed income that Spain attributes to the home, regardless of whether it is let. You also pay IBI, the annual council tax, to the town hall. Both are modest relative to the purchase but should sit in your holding budget.
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