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Spain's proposed "100% property tax" would impose a one-time purchase tax equal to the full property value on non-EU, non-resident buyers.
This measure, announced in January 2025, remains a legislative proposal that has not yet been enacted into law. If implemented, it would effectively double the purchase cost for affected foreign investors buying resale properties in Spain, though new-build purchases and properties owned by EU citizens or Spanish residents would be exempt.
If you want to go deeper, you can check our pack of documents related to the real estate market in Spain, based on reliable facts and data, not opinions or rumors.
Spain's proposed 100% property tax targets non-EU, non-resident buyers with a one-time purchase tax equal to the property's full value.
The measure remains a legislative proposal as of September 2025 and would exempt EU citizens, Spanish residents, and new-build property purchases.
| Key Aspect | Details | Impact |
|---|---|---|
| Tax Type | One-time purchase tax at 100% of property value | Doubles purchase cost for affected buyers |
| Target Group | Non-EU, non-resident buyers only | Excludes EU citizens and Spanish residents |
| Property Types | Resale properties only | New-build purchases remain exempt |
| Legal Status | Proposed legislation, not yet enacted | No implementation date confirmed |
| Tax Base | Higher of cadastral or market value | Applies to entire property value |
| Example Cost | €500,000 property = €500,000 tax | Total cost becomes €1,000,000 |
| Administration | National tax authority coordination | Would integrate with property registry system |
What does Spain's so-called 100% property tax actually mean in practice?
Spain's proposed "100% property tax" means that non-EU, non-resident buyers would pay a one-time tax equal to the full value of the property they purchase.
This tax would effectively double the purchase price for affected buyers. For example, if you're buying a €300,000 apartment in Valencia as a non-EU citizen living outside Spain, you would pay €300,000 in tax on top of the €300,000 purchase price, making your total cost €600,000.
The tax applies to the entire property value, not just a percentage or amount above a threshold. This makes it significantly more punitive than standard property transfer taxes, which typically range from 6% to 11% of the property value across Spain's regions.
As of September 2025, this remains a legislative proposal that has not been enacted into law. The Spanish government announced this measure in January 2025, but it requires parliamentary approval before implementation.
Is this tax a one-time charge or a recurring annual property tax?
The proposed 100% property tax is a one-time purchase tax, not a recurring annual property tax.
You would pay this tax only once, at the time of purchasing the property. It functions as a transaction tax similar to Spain's existing property transfer tax (ITP), but at a much higher rate.
This differs from Spain's annual property tax called IBI (Impuesto sobre Bienes Inmuebles), which property owners pay yearly to their local municipality. The IBI typically ranges from 0.4% to 1.3% of the property's cadastral value annually.
Once you've paid the 100% tax during purchase, you would not face this charge again, even if you later sell and buy another property in Spain.
How is the tax rate calculated—on purchase price, cadastral value, or market value?
The proposed tax would be calculated on the higher of the property's cadastral value or market value, not the purchase price you negotiate.
Spanish tax authorities typically use the cadastral value (valor catastral) as the baseline, which is the official value assigned by the government for tax purposes. However, if the market value is higher than the cadastral value, the tax would apply to the market value instead.
Cadastral values in Spain are often lower than actual market values, particularly in popular areas like Barcelona, Madrid, or coastal regions. For instance, a property in Barcelona's city center might have a cadastral value of €200,000 but a market value of €350,000 - in this case, the 100% tax would apply to the €350,000 market value.
Spanish tax authorities have established procedures to determine market value through professional appraisals when there's a significant discrepancy between cadastral and market values.
It's something we develop in our Spain property pack.
Does the 100% rate apply to the entire property value or only above a certain threshold?
The 100% tax rate applies to the entire property value, with no threshold or exemption amount.
This means that whether you're buying a €100,000 rural property in Extremadura or a €2,000,000 luxury villa in Marbella, you would pay tax equal to the full value of the property.
Unlike progressive tax systems where higher rates apply only above certain amounts, this proposed tax has no minimum threshold below which properties would be exempt or taxed at lower rates.
The flat application across all property values makes this tax particularly burdensome for smaller property purchases, where the tax represents a larger proportion of a buyer's total available capital.
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Who is subject to this tax—Spanish residents, non-residents, or both?
The proposed tax specifically targets non-EU, non-resident buyers only.
Spanish residents, EU citizens, and EEA citizens are completely exempt from this tax. Non-residents are defined as individuals who spend fewer than 183 days per year in Spain, regardless of their citizenship status.
If you're a US, Canadian, Australian, or UK citizen living outside Spain for more than 183 days per year, you would be subject to this tax. However, if you're a German, French, or Italian citizen (EU citizens), you're exempt regardless of where you live.
Non-EU citizens who have established Spanish residency by living in Spain for 183 days or more per year are also exempt from this tax. This creates an incentive for foreign buyers to establish Spanish residency before making property purchases.
Are there any exemptions or reductions, for example for primary residences, rural land, or inheritance?
The proposed legislation includes several key exemptions beyond the residency and citizenship criteria.
| Property Type | Exemption Status | Details |
|---|---|---|
| New-build properties | Exempt | Off-plan purchases from developers not subject to tax |
| Properties owned before law | Exempt | Existing ownership not affected retroactively |
| Primary residences | Exempt for residents | Spanish residents, EU/EEA citizens exempt |
| Inherited properties | Unclear | Inheritance scenarios not specifically addressed |
| Rural agricultural land | Unclear | Proposal focuses on residential resale properties |
The most significant exemption applies to new-build properties purchased directly from developers. If you're buying a newly constructed apartment or villa, you would not pay this 100% tax, making new developments more attractive to non-EU buyers.
Properties purchased before the law takes effect would not be subject to retroactive taxation. However, the proposal doesn't clearly address inheritance situations or rural land purchases, suggesting these scenarios may require separate clarification if the law is enacted.
When did this tax come into effect, and is it still being applied today?
As of September 2025, Spain's 100% property tax has not come into effect and is not being applied.
The Spanish government announced this proposal in January 2025, but it remains legislative proposal that requires parliamentary approval before becoming law. Spain's parliament has not yet voted on the measure, and no implementation date has been set.
The proposal faces significant political challenges due to Spain's complex coalition government structure. The ruling party lacks a clear majority, making the passage of controversial legislation like this uncertain.
Current property purchases by non-EU, non-resident buyers continue under existing tax rules, which include standard transfer taxes ranging from 6% to 11% depending on the region, plus standard closing costs and fees.
What specific government body administers and collects this tax?
If enacted, the 100% property tax would be administered and collected by Spain's national tax authority, known as the Agencia Estatal de Administración Tributaria (AEAT).
The AEAT would coordinate with regional tax offices and local property registries to implement collection procedures. Given that property transactions in Spain require registration with local property registries (Registro de la Propiedad), the tax payment would likely be integrated into the existing property transfer process.
Regional governments currently collect property transfer taxes (ITP) through their own tax collection agencies. The proposed national tax would likely require coordination between national and regional authorities to avoid double taxation while ensuring proper collection.
Property buyers would probably need to present proof of tax payment before completing the property registration process, similar to current requirements for transfer taxes and other purchase-related fees.
It's something we develop in our Spain property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Spain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How much would someone realistically pay if they own a property worth €250,000 or €1,000,000 in Spain?
For a property worth €250,000, a non-EU, non-resident buyer would pay exactly €250,000 in tax if this proposal becomes law.
| Property Value | 100% Tax Amount | Total Purchase Cost |
|---|---|---|
| €250,000 | €250,000 | €500,000 |
| €500,000 | €500,000 | €1,000,000 |
| €750,000 | €750,000 | €1,500,000 |
| €1,000,000 | €1,000,000 | €2,000,000 |
| €1,500,000 | €1,500,000 | €3,000,000 |
For a €1,000,000 property, the tax would be €1,000,000, making the total purchase cost €2,000,000. These amounts would be in addition to standard closing costs, legal fees, and notary expenses, which typically add another 3-5% to the purchase price.
This dramatic increase in purchase costs would make Spain one of the most expensive countries in the world for foreign property investment, significantly more costly than traditional alternatives like Portugal, Italy, or Greece.
How does this tax compare to Spain's standard property taxes like IBI or inheritance tax?
Spain's proposed 100% property tax is dramatically higher than all existing Spanish property taxes.
The annual IBI property tax ranges from 0.4% to 1.3% of the property's cadastral value per year. For a €500,000 property, you would typically pay between €2,000 and €6,500 annually in IBI tax.
Spain's property transfer tax (ITP) varies by region but ranges from 6% to 11% of the property value. In Madrid, for example, you pay 6% ITP on resale properties, meaning a €500,000 property would incur €30,000 in transfer tax.
Inheritance tax in Spain can be significant for non-residents, potentially reaching rates of 34% to 82% of the inherited property value, depending on the relationship to the deceased and the property's location. However, many regions offer substantial reductions or exemptions.
The proposed 100% tax would be 10 to 15 times higher than existing transfer taxes and would represent decades worth of annual IBI payments in a single transaction.
What legal or financial consequences exist for not paying this tax on time?
Non-payment of the proposed 100% property tax would likely result in severe legal and financial penalties under Spanish tax law.
Spanish tax authorities typically impose penalty interest rates of 3-5% per year on unpaid taxes, plus additional fines that can range from 50% to 150% of the unpaid tax amount for serious violations.
For unpaid property-related taxes, Spanish authorities can place liens on the property, preventing its sale or transfer until taxes are paid in full. In extreme cases, they can initiate property seizure proceedings to recover unpaid taxes.
Non-EU buyers who fail to pay this tax might also face restrictions on future property purchases in Spain and could encounter difficulties with visa applications or residency processes.
The property registration process would likely be frozen until tax payment is confirmed, meaning you couldn't legally complete the purchase or obtain clear title to the property without paying the required tax.
Are there ways to challenge, reduce, or avoid this tax legally, for example through residency status or restructuring ownership?
Several legal strategies could potentially help avoid or reduce the proposed 100% property tax.
1. **Establishing Spanish residency**: Spending 183 days or more per year in Spain would exempt you from this tax entirely, regardless of your citizenship.2. **Purchasing new-build properties**: Buying directly from developers or off-plan properties remains exempt from this tax.3. **Corporate ownership structures**: Purchasing through a Spanish or EU-based company might provide alternatives, though this would require careful legal structuring.4. **Timing of purchases**: Buying before the law takes effect would avoid the tax entirely, as it's not retroactive.5. **EU citizenship acquisition**: Obtaining citizenship in any EU country would provide permanent exemption from this tax.Property ownership restructuring through family trusts, corporate entities, or partnership structures might offer legal avenues to minimize tax exposure, but these strategies would require expert legal and tax advice to ensure compliance with Spanish law.
Challenging the tax through administrative appeals or court proceedings would be possible once the law is enacted, particularly if you can demonstrate that the tax application is incorrect or that you qualify for exemptions.
It's something we develop in our Spain property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Spain's proposed 100% property tax represents a significant shift in the country's approach to foreign property investment, specifically targeting non-EU, non-resident buyers with a tax equal to the full property value.
While this measure remains a legislative proposal as of September 2025, potential property buyers should monitor its progress through Spain's parliament and consider alternative strategies such as establishing residency or focusing on new-build properties if the tax becomes law.
Sources
- BBC News - Spain Property Tax Proposal
- Costa Luz Lawyers - Spanish Tax Proposal Analysis
- Hansson Hertzell - Spain Property Tax Guide
- UK Property Accountants - Spain Tax Impact Analysis
- Worldwide Lawyers - Spain Property Tax Overview
- Blevins Franks - Spain Tax Increase Analysis
- Iberian Tax - Cadastral Value Guide
- Merlis Homes - Property Tax Guide