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Foreigners buying residential property in Spain face multiple taxes and fees that vary significantly between regions and property types. Understanding these costs upfront is crucial for accurate budgeting and investment planning. Tax rates can range from 6% to over 27% depending on the specific circumstances, with additional fees pushing total costs even higher.
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Property transfer tax for resale homes ranges from 6% to 13% depending on the region and property value. New-build properties from developers are subject to 10% VAT plus 0.5% to 1.5% stamp duty.
Additional costs include notary fees (0.5-1%), land registry fees (0.1-0.25%), annual property tax (0.4-1.1% of cadastral value), and potential wealth tax for high-value properties above €700,000.
| Tax/Fee Type | Rate/Amount | Applies To |
|---|---|---|
| Property Transfer Tax (ITP) | 6-13% of property value | Resale properties |
| VAT (IVA) | 10% of property value | New-build properties |
| Stamp Duty (AJD) | 0.5-1.5% | New-build properties only |
| Notary Fees | 0.5-1% | All property purchases |
| Land Registry Fees | 0.1-0.25% | All property purchases |
| Annual Property Tax (IBI) | 0.4-1.1% of cadastral value | All property owners |
| Capital Gains Tax | 19-27% on profit | Property sales |
How much is the property transfer tax when buying a resale house in Spain?
Property Transfer Tax (ITP) for resale homes in Spain ranges from 6% to 13% of the declared purchase price, with rates varying significantly between autonomous communities.
Most Spanish regions apply a flat rate between 6% and 10% for standard resale property transactions. However, as of September 2025, Catalonia has implemented a progressive system that increases with property value.
In Catalonia specifically, the rates are 10% up to €600,000, 11% from €600,000 to €900,000, 12% from €900,000 to €1.5 million, and 13% above €1.5 million. This means a €800,000 resale property in Barcelona would incur €68,000 in transfer tax (€60,000 for the first €600,000 at 10%, plus €22,000 for the remaining €200,000 at 11%).
Madrid typically applies 6% for most transactions, while Andalusia generally charges 7% for properties under €400,000 and higher rates for more expensive homes. Always verify the exact rate for your specific region before finalizing any purchase.
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What is the VAT rate if I buy a brand-new property directly from a developer in Spain?
VAT (IVA) on brand-new residential properties purchased directly from developers is 10% of the purchase price nationwide across Spain.
This 10% VAT rate applies specifically to standard residential homes when buying new construction. Commercial or non-residential properties face a higher 21% VAT rate instead.
Additionally, new-build properties are also subject to Stamp Duty (AJD), which ranges from 0.5% to 1.5% depending on the autonomous community. For example, Catalonia charges 1.5% stamp duty, Andalusia applies 1.2%, and Madrid charges 0.75%.
This means the total tax burden for a new €500,000 apartment would be €50,000 in VAT plus €3,750 to €7,500 in stamp duty, depending on the region. The combined cost ranges from 10.75% to 11.5% of the purchase price.
Do foreigners have to pay stamp duty, and if so, how much is it in Spain?
Both Spanish residents and foreigners must pay stamp duty (AJD) when purchasing new-build properties in Spain, with no distinction made based on nationality or residency status.
Stamp duty rates range from 0.5% to 1.5% of the property purchase price, depending on the autonomous community where the property is located. This tax applies exclusively to new construction purchased directly from developers.
Specific regional rates include 1.5% in Catalonia, 1.2% in Andalusia, 0.75% in Madrid, and 1.0% in Valencia. Resale properties are exempt from stamp duty but pay Property Transfer Tax instead.
For a €400,000 new apartment, stamp duty would cost €3,000 in Madrid, €4,800 in Andalusia, or €6,000 in Catalonia. This fee is paid during the completion process alongside other closing costs.
Are there notary fees when purchasing a house, and what percentage of the price should I expect to pay?
Notary fees are mandatory for all property purchases in Spain and typically range from 0.5% to 1% of the property purchase price.
These fees are calculated on a sliding scale established by the Spanish government, with costs generally decreasing as a percentage when property values increase. The buyer almost always pays the notary costs as part of the standard transaction process.
For a €300,000 property, notary fees would typically amount to between €1,500 and €3,000. Higher-value properties may see slightly lower percentage rates but still substantial absolute amounts.
The notary plays a crucial role in Spanish property transactions by verifying legal documents, confirming identity, and ensuring all legal requirements are met before property transfer. These fees are non-negotiable and set by official government scales.
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How much are the land registry fees, and who covers them in Spain?
Land registry fees in Spain typically amount to 0.1% to 0.25% of the property purchase price and are customarily paid by the buyer.
These fees cover the cost of officially registering the property transfer in the Spanish Land Registry (Registro de la Propiedad), which provides legal protection and proof of ownership. Registration is technically optional but highly recommended for security purposes.
For a €500,000 property, land registry fees would range from €500 to €1,250. The exact amount depends on the property value and specific regional variations in fee structures.
The registration process typically takes several weeks to complete after the purchase deed is signed. Without proper registration, property ownership cannot be legally verified, making it essential for all serious property investments in Spain.
Are there annual property taxes for homeowners in Spain, and how are they calculated?
Spanish property owners must pay annual local property tax (IBI - Impuesto sobre Bienes Inmuebles) calculated as a percentage of the property's cadastral value.
IBI rates typically range from 0.4% to 1.1% of the cadastral value per year, with each local council setting its own rate within legal limits. The cadastral value is usually lower than the market value but is reassessed periodically by local authorities.
Property owners may also face additional annual charges such as rubbish collection tax, community fees for apartments, and other local municipal charges. These additional costs are generally minor compared to the main IBI tax.
For example, a property with a cadastral value of €200,000 in a municipality charging 0.8% IBI would incur €1,600 annually in property tax. Coastal and tourist areas often have higher rates than inland regions.
Do foreigners have to pay a wealth tax in Spain after buying a house, and what are the thresholds?
Foreigners must pay wealth tax on Spanish property and assets even if they are not Spanish tax residents, with national thresholds starting at €700,000 net assets per person.
| Net Asset Value | Tax Rate | Example Annual Tax |
|---|---|---|
| €700,000 - €1,000,000 | 0.2% - 0.5% | €600 - €1,500 |
| €1,000,000 - €2,000,000 | 0.5% - 1.0% | €2,500 - €10,000 |
| €2,000,000 - €5,000,000 | 1.0% - 2.0% | €20,000 - €60,000 |
| €5,000,000 - €10,000,000 | 2.0% - 2.75% | €100,000 - €137,500 |
| Above €10,000,000 | 2.75% - 3.5% | €275,000+ |
The first €300,000 of a primary residence value is exempt from wealth tax calculations, but this only applies to Spanish tax residents. Regional variations exist, with some autonomous communities offering reductions or increases to the national rates.
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If I rent out my property, what income tax applies to foreigners in Spain, and at what rate?
Non-resident foreigners from EU/EEA countries pay 19% income tax on net rental profits, while non-residents from other countries pay 24% on gross rental income without expense deductions.
EU/EEA citizens can deduct legitimate rental expenses such as property management fees, maintenance costs, insurance, and depreciation before calculating the 19% tax on net profits. This significantly reduces the effective tax burden compared to the gross rental taxation.
Non-EU citizens face the 24% rate on total rental income with no deductible expenses allowed, making rental investments less attractive from a tax perspective. For example, €24,000 annual rental income would result in €5,760 in taxes regardless of actual expenses incurred.
Spanish tax residents pay progressive income tax rates on worldwide rental income, which may be more favorable for high-income earners but requires full Spanish tax compliance and reporting.
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.
Do I need to pay capital gains tax when selling the property later, and what is the current rate in Spain?
Capital gains tax applies to property sales in Spain with progressive rates from 19% to 27% depending on the profit amount realized from the sale.
The tax rates are 19% on the first €6,000 of capital gain, 21% from €6,000.01 to €50,000, 23% from €50,000.01 to €200,000, and 27% on gains above €200,000. These rates apply to both residents and non-residents selling Spanish property.
Capital gain is calculated as the difference between the sale price and the original purchase price, adjusted for inflation and improvement costs where applicable. Property owned for more than one year qualifies for these reduced rates rather than ordinary income tax treatment.
For example, selling a property for €600,000 that was purchased for €400,000 would generate a €200,000 capital gain, resulting in tax of €42,150 (€1,140 + €9,240 + €31,050 + €720). Additional municipal capital gains tax may also apply in some areas.
Are there inheritance or gift taxes if I leave the property to family members in Spain?
Spanish inheritance and gift taxes apply when property is transferred to family members, with rates and allowances varying significantly between autonomous communities and family relationships.
Tax rates can range from 7.65% to over 30% depending on the inherited amount, relationship to the deceased, and the autonomous community where the property is located. Close family members typically receive more favorable treatment than distant relatives or unrelated beneficiaries.
Some regions offer substantial reductions for spouses and children, while others maintain high tax burdens on inherited property. Madrid and Valencia provide generous exemptions for family transfers, while other regions may charge substantial inheritance taxes even for direct descendants.
Professional estate planning advice is essential for foreign property owners in Spain to minimize inheritance tax exposure and ensure proper succession planning. The complexity of regional variations makes generic advice insufficient for effective tax planning.
What additional costs like legal fees or administrative charges should I budget for when buying a home in Spain?
Legal and solicitor fees typically cost 1% to 1.5% of the property purchase price, making professional legal representation a significant expense in Spanish property transactions.
1. **Bank charges and mortgage fees** - ranging from €1,000 to €5,000 depending on loan amount and complexity2. **Property survey and valuation fees** - typically €300 to €800 for residential properties 3. **NIE number application** - approximately €10 plus administrative costs and potential agency fees4. **Translation services** - €200 to €500 for document translation if required5. **Insurance setup costs** - first year premiums plus arrangement fees for property insuranceAdministrative charges may include bank transfers, document preparation, courier services, and various bureaucratic fees that can add several hundred euros to the total cost. Currency exchange costs should also be factored in for foreign buyers.
Total additional costs beyond taxes typically add 2% to 3% to the property purchase price. For a €400,000 property, budget an additional €8,000 to €12,000 for these professional services and administrative expenses.
Does the tax rate vary between different regions of Spain, and if yes, what are the main differences?
Tax rates vary significantly between Spanish autonomous communities, particularly for Property Transfer Tax, stamp duty, wealth tax, and inheritance taxes.
| Region | Property Transfer Tax (ITP) | Stamp Duty (AJD) | Notable Features |
|---|---|---|---|
| Catalonia | 10-13% (progressive) | 1.5% | Highest rates, progressive system |
| Madrid | 6% | 0.75% | Lower rates, wealth tax reductions |
| Andalusia | 7-8% | 1.2% | Moderate rates with some reductions |
| Valencia | 8-10% | 1.0% | Standard rates with family exemptions |
| Basque Country | 4% | 0.5% | Lowest rates, special tax regime |
Madrid offers significant wealth tax reductions and generally maintains lower property tax rates to attract investment. The Basque Country and Navarre have special tax arrangements with the central government, resulting in lower rates across multiple categories.
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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.
Foreign property buyers in Spain face a complex tax landscape that requires careful planning and professional guidance to navigate successfully.
As of September 2025, total tax costs can range from 11% to over 20% of the property value when including all fees, taxes, and professional services, making proper budgeting essential for successful property investment.
Sources
- Spanish Property Insight - Catalan Property Transfer Tax Changes
- Idealista - Property Purchase Costs and Taxes in Spain
- Hansson Hertzell - Spain Property Tax for Non-EU Buyers
- International Bar Association - Spain Real Estate Tax Developments
- The Property Agent - New Build VAT in Spain
- Immo365 Costa Brava - New Construction Tax Spain
- Lawants - Buying House Spain Guide
- RSM Spain - Real Estate Tax Guide 2025
- Blevins Franks - Spain Property Tax Proposals
- Taxadora - Spain Property Tax Foreign Buyers 2025