ELITE WORLD ESTATES BLOG

Written by Anita Orłowska on 13.02.2026 - 7m reading

Buying property in Spain is exciting — sunshine, lifestyle, and long-term investment potential. But once the purchase is completed, an important question appears: what taxes do I have to pay as a non-resident? The Spanish system may seem complex at first glance, but once broken down, it follows clear logic. Some taxes apply simply because you own property, others because you generate income, and some relate to the overall value of your assets in Spain.

Contents:

Below is a clear and structured explanation of the four key taxes that most commonly affect non-resident property owners

Impuesto sobre Bienes Inmuebles (IBI) is Spain’s equivalent of an annual property ownership tax. Every property owner must pay it — regardless of whether they are a tax resident in Spain or not.

This is a tax on ownership, not on income.

Key points:

• Paid annually to the local town hall (ayuntamiento)

• Calculated based on the valor catastral (cadastral value)

• The rate usually ranges between 0.4% and 1.3%

• The person registered as owner on 1 January of the tax year is responsible for payment

The cadastral value is typically lower than the market value, which keeps the tax relatively predictable. IBI is usually the simplest and most straightforward tax obligation.

Impuesto sobre la Renta de No Residentes (IRNR) applies to individuals and companies that are not tax residents in Spain but own property there.

This is where many foreign owners are surprised.

Spain applies what is called “imputed income” (renta imputada). Even if the property is used only privately and generates no real income, the tax authorities assume a notional income.

The taxable base is:

• 2% of the cadastral value

• or 1.1% if the cadastral value has been updated within the last 10 years

The tax rate is:

• 19% for EU/EEA residents

• 24% for non-EU residents

The tax return is filed using Form Modelo 210, generally by 31 December of the following year.

In this case, IRNR is paid on the actual rental income.

EU/EEA residents may deduct allowable expenses (such as community fees, insurance, certain interest payments, and maintenance costs within legal limits). Non-EU residents are taxed on gross income without deductions.
The tax rates remain 19% or 24%, depending on residency status.

If the property is rented only part of the year and used privately for the remainder, separate proportional declarations must generally be filed.

IRNR is the most commonly overlooked tax obligation for non-residents.

Impuesto sobre el Patrimonio is a tax on an individual’s net assets as of 31 December each year.

For non-residents, it applies only to assets located in Spain, including:

• Real estate

• Spanish bank accounts

• Financial investments

• Shares in companies whose assets consist mainly (more than 50%) of Spanish real estate

Key principles:

• General tax-free allowance: €700,000

• Progressive rates ranging from approximately 0.2% to 3.5%

• Regional variations may apply depending on the autonomous community

Some regions, such as Madrid and Andalusia, have introduced significant rebates. However, this does not automatically eliminate the need for analysis, especially because national rules may still apply.

In practice, this tax mainly affects higher-value properties or investors holding substantial assets in Spain.

Impuesto Temporal de Solidaridad de las Grandes Fortunas (ITSGF) is a nationwide tax introduced to offset regional wealth tax rebates.

It applies to individuals whose net assets in Spain exceed €3,000,000.

There is also a €700,000 general allowance. In practical terms, taxation begins when Spanish-based assets exceed approximately €3,700,000.

Progressive tax rates:

• 1.7%

• 2.1%

• 3.5%

This tax functions as a complementary national levy and may apply regardless of regional wealth tax rebates.

For most owners of standard holiday apartments, this tax will not apply. However, for larger portfolios and high-net-worth individuals, it requires careful planning.

Most tax issues do not arise from IBI, but from IRNR and wealth-related taxes.

Common mistakes include:

• Failing to file when the property is not rented

• Assuming that no rental income means no tax

• Ignoring wealth tax thresholds

• Overlooking official correspondence

This is why tax implications should already be considered at the purchase stage. Many buyers focus solely on price and location, only discovering later that additional tax obligations apply. If you are at the beginning of the process, it is worth reviewing our guide on how to buy a property in Spain step by step, which explains the entire procedure — from reservation to notarial deed and the first tax obligations.

In Spain, tax audits may occur several years later. If a case enters the enforcement stage (procedimiento de apremio), interest and surcharges are added to the outstanding tax. In serious cases, administrative penalties can be substantial.

Tax planning should therefore be treated as part of the investment itself, not as an afterthought.

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Let us narrow down the search among the properties available through us, by contacting us and finding the best options for you. We are here to help you! Please enter your contact details below and we will contact you as soon as possible.

Let us narrow down the search among the properties available through us, by contacting us and finding the best options for you. We are here to help you!
Please enter your contact details below and we will contact you as soon as possible.