Spanish Property Tax for Foreign Owners: What You Pay Each Year

Owning a home on the Costa del Sol brings a set of recurring obligations that are straightforward once understood. For most international owners, Spanish property tax comes down to three questions each year: the municipal IBI charged by the town hall, non-resident income tax filed with the Agencia Tributaria and, for the largest fortunes, wealth taxation. A further set of taxes applies only at the moment you sell.

This guide sets out what a foreign owner of a luxury home in Marbella and on the Costa del Sol can expect to pay, how each tax works and which forms are involved. It is written for owners who live mainly outside Spain, although much of it also applies to those who have become tax resident here.

Tax is personal, and the right answer always depends on your country of residence, the structure through which you hold the property and how you use it. Treat what follows as an orientation, and take individual advice from a Spanish tax adviser before making any decision.

The annual taxes at a glance

A foreign owner of a Spanish home typically deals with the following each year:

• IBI (Impuesto sobre Bienes Inmuebles), the municipal property tax charged by the local town hall.
• Non-resident income tax (IRNR), declared on form 210, whether the home is used by you, left empty or let.
• Wealth tax and the state solidarity tax on large fortunes, which depend on the size of your net worth and where you are resident.

Community fees for a gated development or an apartment building are not a tax, but they are a regular cost that sits alongside these and belongs in any ownership budget.

IBI: the municipal property tax

IBI is the local tax that every property owner in Spain pays, resident or not. It is levied by the town hall where the property is located and is calculated on the cadastral value (valor catastral), the administrative value recorded for the property in the Catastro. The cadastral value is usually quite different from the market value.

Each municipality sets its own rate within the national framework, so the IBI on comparable homes can differ between Marbella, Benahavís, Estepona and Sotogrande. The bill is issued once a year, and most owners arrange a direct debit from their Spanish bank account so that nothing is missed.

Unpaid IBI can follow the property rather than the previous owner, which is why checking the latest IBI receipts is a standard part of due diligence. Our guide to the process of purchasing real estate in Marbella explains the checks carried out before completion.

Non-resident property tax in Spain (IRNR)

For owners who are not tax resident in Spain, the most important annual obligation is non-resident income tax, known as IRNR (Impuesto sobre la Renta de No Residentes). This is what most people mean by non-resident property tax in Spain, and it applies even if the home generates no income at all.

When the property is for your own use or empty

If you keep the home for your own use, lend it to family or leave it empty, the Spanish tax authority treats it as producing a notional income. The imputed annual income is 1.1% or 2% of the cadastral value, depending on whether the cadastral value has been revised. Tax is then charged on that imputed figure.

The general IRNR rates are 19% for residents of the European Union and the European Economic Area, and 24% for other non-residents. The return is filed on form 210, which can be submitted by the owner or, more commonly, by a tax adviser or fiscal representative in Spain.

When the property is let

If you let the property, the rental income is taxed in Spain too. The way that income is calculated and declared differs from the imputed-income regime, and the treatment can vary according to your country of residence. Owners who intend to let their home, whether for the season or on a longer contract, should agree the reporting approach with an adviser before the first tenant arrives.

Co-owners and couples

Where a property is owned by more than one person, each co-owner is generally treated as a separate taxpayer on their share. Couples who buy together should therefore expect one return per owner.

Wealth tax in Andalusia

Spain has a Wealth Tax (Impuesto sobre el Patrimonio) that is managed largely by the regions, and the regional rules make a real difference. Andalusia applies a 100% rebate on Wealth Tax, a meaningful consideration for internationally mobile families deciding where to own.

The picture is not complete without the Temporary Solidarity Tax on Large Fortunes (ITSGF). Created by Law 38/2022, initially for 2022 and 2023, it has since been extended. It is a state tax designed to reach very large net worths, including in regions that rebate wealth tax. Whether it affects you depends on your overall net worth, your residence and how your assets are held, so individual tax advice is essential.

For a wider view of the fiscal landscape, read our article on taxation and advantages for international buyers in Marbella.

Taxes when you buy: a brief reminder

Although this guide focuses on the annual cost of ownership, purchase taxes shape the overall budget and are worth recalling. In Andalusia, resale homes pay transfer tax (ITP) at a general rate of 7%. New builds pay 10% VAT (IVA) on homes, plus stamp duty (AJD) at 1.2%. Reduced rates exist for certain main residences; a second home does not normally qualify.

If you are weighing a newly built home against a resale property, our article on buying a new-build property in Marbella looks at the wider advantages beyond tax.

Taxes when you sell

Selling triggers its own obligations, and non-resident sellers in particular benefit from planning ahead.

The 3% withholding

When a buyer purchases from a non-resident seller, the buyer must withhold 3% of the price and pay it to the tax authority on form 211. The withholding is a payment on account of the seller's tax on the gain, not an additional tax. The seller then settles the final position with the Agencia Tributaria, which may lead to a further payment or a refund.

Capital gains

Any gain on the sale is taxable in Spain. How the gain is calculated, and the rate that applies, depend on your residence status and personal circumstances, so the figures should be prepared with your adviser well before you accept an offer.

Plusvalía municipal

The plusvalía municipal is a local tax on the increase in the value of the land, due when the property is sold. It is levied by the town hall and is separate from any tax on your capital gain. On a sale it is normally the seller's liability, and it should be factored into the net proceeds from the outset.

Keeping your affairs in order

In our experience, the practical challenge for foreign owners is less the tax itself than keeping every filing up to date. A few simple habits make ownership effortless:

• Keep your NIE, your Spanish bank account and your contact details current with the tax authority and the town hall.
• Arrange direct debits for IBI and community fees.
• Appoint a tax adviser or fiscal representative to file form 210 for each owner every year.
• Keep the deeds, the purchase documents and receipts for improvements, as they will matter when you eventually sell.
• Review your position whenever your residence, the use of the property or the ownership structure changes.

For owners considering a further acquisition, the tax profile of a home is only one part of the picture. Location, build quality and lifestyle carry equal weight, which is why we encourage clients to explore our investment opportunities on the Costa del Sol alongside the full collection of luxury properties for sale.

Frequently asked questions

Do non-residents pay property tax in Spain?

Yes. Non-residents pay the municipal IBI like any owner, and they also pay non-resident income tax (IRNR) on the property each year, declared on form 210, even if the home is not let.

How is non-resident tax calculated on a holiday home?

If the home is for your own use or empty, the tax authority imputes an annual income of 1.1% or 2% of the cadastral value. The IRNR rate, 19% for EU and EEA residents or 24% for other non-residents, is then applied to that figure.

Is there wealth tax on property in Andalusia?

Andalusia applies a 100% rebate on Wealth Tax. The state Temporary Solidarity Tax on Large Fortunes can still affect very large net worths, so individual advice is recommended.

What is the 3% retention when buying from a non-resident?

The buyer must withhold 3% of the purchase price and pay it to the tax authority on form 211. It acts as a payment on account of the seller's tax on any gain.

What is the plusvalía tax in Spain?

The plusvalía municipal is a local tax on the increase in land value, charged by the town hall when a property is sold.

Speak to BARNES Marbella

Whether you are buying your first home on the Costa del Sol or reviewing a property you have owned for years, we work alongside trusted tax advisers and lawyers to make ownership simple and discreet. Understanding Spanish property tax is the first step; the right advice makes it routine. Contact BARNES Marbella for a private conversation, or request a confidential valuation of your property.