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Everything you need to know before buying real estate is included in our Spain Property Pack
Property ownership in Spain comes with mandatory annual tax obligations that every owner must understand and budget for. After purchasing real estate in Spain, you'll face several yearly tax requirements including the property ownership tax (IBI), non-resident income tax obligations, and potentially additional regional surcharges depending on your location and residency status.
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All Spanish property owners pay annual IBI tax calculated on cadastral value, typically ranging from 0.4% to 1.3% depending on location.
Non-residents must also pay IRNR tax at 19% (EU residents) or 24% (non-EU residents) on imputed rental income, even for personal-use properties.
| Tax Type | Who Pays | Rate/Amount | Payment Frequency | Based On |
|---|---|---|---|---|
| IBI (Property Tax) | All property owners | 0.4% - 1.3% of cadastral value | Annual | Cadastral value |
| IRNR (Non-resident tax) | Non-residents only | 19% (EU) / 24% (non-EU) | Annual | Imputed rental income (1.1% of cadastral value) |
| Rental Income Tax | Property owners with rental income | 19% (EU) / 24% (non-EU) | Quarterly | Net rental income |
| Wealth Tax | High-value property owners | Varies by region | Annual | Total asset value |
| Regional Surcharges | Property owners in specific areas | Varies by municipality | Annual | Local regulations |
Do you need to pay the annual property ownership tax (IBI) and how is it calculated in Spain?
Yes, paying the annual IBI (Impuesto sobre Bienes Inmuebles) is mandatory for all property owners in Spain, regardless of your residency status or nationality.
The IBI is calculated by applying a municipal tax rate to your property's cadastral value, which is the official assessed value determined by Spanish land registry authorities. This cadastral value typically represents 50-70% of the actual market value of your property as of September 2025.
Your local municipality sets the specific IBI rate, which can range from 0.4% to 1.3% of the cadastral value annually. Urban properties generally face higher rates than rural properties, with major cities like Madrid and Barcelona typically applying rates closer to the upper limit of this range.
The calculation formula is straightforward: IBI Tax = Cadastral Value × Municipal Rate. For example, if your property has a cadastral value of €200,000 and your municipality applies a 0.8% rate, your annual IBI would be €1,600.
How do you find out the cadastral value of your property, which is used to calculate the IBI?
You can find your property's cadastral value through several official channels, with the most convenient being online access through government portals.
The easiest method is checking your annual IBI tax bill, which always displays the cadastral value prominently. This bill is sent by your local municipality each year and serves as the official record of your property's assessed value.
For online access, visit the official Spanish Cadastre website at www.sedecatastro.gob.es, where you can search using your property's cadastral reference number or address. This service provides free access to cadastral information 24/7.
Alternative methods include reviewing your property deed (escritura) if you purchased after 1996, as cadastral values are typically included in modern property transactions. You can also visit your local Cadastre office in person for assistance with finding or verifying your property's cadastral value.
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What is the typical annual IBI rate in the city or region where your property is located?
IBI rates vary significantly across Spanish regions and municipalities, with coastal tourist areas and major cities typically applying higher rates than inland or rural locations.
| Region/Area | Typical IBI Rate Range | Example Cities |
|---|---|---|
| Costa del Sol | 0.8% - 1.0% | Marbella, Málaga, Torremolinos |
| Costa Blanca | 0.6% - 0.9% | Alicante, Benidorm, DĂ©nia |
| Balearic Islands | 0.7% - 1.1% | Palma, Ibiza, MahĂłn |
| Canary Islands | 0.5% - 0.8% | Las Palmas, Santa Cruz, Puerto de la Cruz |
| Madrid Region | 0.8% - 1.3% | Madrid, Getafe, Alcalá de Henares |
| Catalonia | 0.9% - 1.2% | Barcelona, Girona, Tarragona |
| Valencia Region | 0.6% - 1.0% | Valencia, CastellĂłn, GandĂa |
Do you need to pay the non-resident income tax (IRNR) if you don't live in Spain full time?
Yes, if you're not a Spanish tax resident, you must pay the IRNR (Impuesto sobre la Renta de No Residentes) annually, even if you don't rent out your property.
Spanish tax law considers you a non-resident if you spend fewer than 183 days per year in Spain or if your main economic interests are located outside Spain. Non-residents are subject to this special tax regime that applies to all Spanish-sourced income, including imputed rental income from property ownership.
This tax applies regardless of whether you actually rent out your property or use it exclusively for personal holidays. Spain assumes that owning property generates a theoretical rental income, which becomes taxable under the IRNR system.
You must file an annual IRNR tax return (Form 210) by December 31st for the previous tax year, declaring this imputed income and paying the corresponding tax. Failure to file can result in penalties ranging from €150 to €6,000 depending on the delay and amount owed.
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How is the imputed rental income for IRNR calculated if the property is not rented out?
The imputed rental income calculation uses a fixed percentage of your property's cadastral value, determined by Spanish tax authorities.
For most urban properties with updated cadastral values, the imputed rental income equals 1.1% of the cadastral value annually. However, if your property's cadastral value hasn't been updated since 1994, the rate increases to 2% of the cadastral value.
The calculation follows this formula: Imputed Annual Income = Cadastral Value × 1.1% (or 2% for older valuations). For example, a property with a cadastral value of €150,000 would generate an imputed annual income of €1,650 (€150,000 × 1.1%).
This imputed income then becomes subject to the IRNR tax rate based on your residency status. The system assumes this theoretical rental income exists regardless of actual property usage, creating a tax obligation even for properties used solely for personal vacations.
Properties with special characteristics, such as luxury homes or unique locations, may have different imputation rates, but these cases are relatively rare and typically require professional tax advice.
What percentage tax rate applies to IRNR for EU residents compared to non-EU residents?
EU and EEA residents benefit from preferential IRNR tax rates compared to non-EU citizens, reflecting European Union tax coordination agreements.
EU and EEA residents pay 19% IRNR tax on their imputed rental income from Spanish property ownership. This rate also applies to residents of countries with double taxation agreements with Spain, including most major economies.
Non-EU residents face a higher rate of 24% IRNR tax on the same imputed income. This 5 percentage point difference can represent significant savings for European property owners over time.
Using the previous example of €1,650 imputed annual income: EU residents would pay €313.50 annually (€1,650 × 19%), while non-EU residents would pay €396 annually (€1,650 × 24%). Over a 10-year period, this difference amounts to €825 in additional tax for non-EU owners.
These rates apply specifically to imputed rental income from non-rented properties. Different rules and rates may apply to actual rental income or capital gains from property sales.
If you rent out your property, how is rental income taxed each year in Spain?
Rental income from Spanish property is subject to IRNR tax for non-residents, but the calculation differs significantly from imputed income taxation.
Non-residents must pay IRNR tax on actual net rental income rather than imputed income. The tax rates remain the same: 19% for EU/EEA residents and 24% for non-EU residents.
You must file quarterly IRNR returns (Form 210) by the 20th of January, April, July, and October for rental income received during the previous quarter. Annual reconciliation occurs with the final return filed by December 31st.
Net rental income calculation includes gross rental receipts minus allowable deductions such as property management fees, maintenance costs, insurance premiums, and other legitimate expenses. EU residents can deduct more expenses than non-EU residents.
Professional property management companies often handle tax withholding and filing requirements for foreign owners, charging fees of 8-12% of rental income for comprehensive tax and management services as of September 2025.
Can you deduct expenses such as maintenance, insurance, or mortgage interest against rental income for tax purposes?
Your ability to deduct expenses against rental income depends entirely on your residency status and nationality, with EU citizens receiving significantly more favorable treatment.
1. **EU/EEA residents can deduct the following expenses:** - Property maintenance and repairs - Property management fees - Insurance premiums - Mortgage interest payments - Community fees and local taxes - Professional services (legal, accounting) - Depreciation on furniture and fixtures2. **Non-EU residents cannot deduct these expenses** and must pay IRNR tax on gross rental income without reductions.3. **Property improvement expenses** may be capitalized and offset against future capital gains rather than deducted against annual rental income.4. **Documentation requirements** include maintaining receipts, invoices, and contracts in Spanish or officially translated versions for potential tax authority review.5. **Annual expense limits** may apply to certain categories, with luxury or excessive expenses potentially disallowed by tax authorities.It's something we develop in our Spain property pack.
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Do you need to file an annual tax return in Spain even if the property is only for personal use?
Yes, all non-resident property owners must file an annual Spanish tax return, regardless of whether the property generates actual income.
Non-residents must submit Form 210 (DeclaraciĂłn del Impuesto sobre la Renta de No Residentes) annually by December 31st for the previous tax year. This requirement applies even if you only use the property for personal vacations and never rent it out.
The annual return declares the imputed rental income calculated at 1.1% (or 2%) of the cadastral value, with corresponding IRNR tax due at 19% (EU residents) or 24% (non-EU residents). Failure to file results in automatic penalties starting at €150.
Spanish tax residents who own property are subject to different filing requirements under the general income tax system (IRPF) rather than IRNR. The filing threshold and requirements vary based on total income and specific circumstances.
Professional tax advisors typically charge €150-300 annually for preparing and filing non-resident tax returns, depending on complexity and additional services required.
Are there any annual wealth taxes in Spain that might apply to your property ownership?
Spain imposes wealth tax (Impuesto sobre el Patrimonio) in certain autonomous communities, which may affect high-value property owners as of September 2025.
Wealth tax applies to individuals with net worldwide assets exceeding €700,000, though this threshold varies by autonomous community. Some regions like Madrid have eliminated wealth tax entirely, while others like Catalonia maintain higher rates.
Property values are typically assessed at market value rather than cadastral value for wealth tax purposes. Properties worth over €300,000 may trigger wealth tax obligations depending on your total asset portfolio and chosen tax residence.
Non-residents face wealth tax only on Spanish assets, while Spanish tax residents must declare worldwide wealth. Tax rates typically range from 0.2% to 3.5% on net wealth above the exemption threshold, varying significantly by autonomous community.
Recent political changes have created uncertainty around wealth tax application, with some regions eliminating or reducing rates while others maintain or increase them. Professional tax advice becomes essential for properties valued above €500,000.
Does your region or autonomous community apply surcharges or additional property-related taxes each year?
Many Spanish municipalities and autonomous communities impose additional annual charges beyond the standard IBI and IRNR taxes.
Common municipal surcharges include waste collection taxes (typically €50-150 annually), street lighting fees, and special infrastructure contributions. These charges appear on separate bills or combined with your IBI statement.
Autonomous communities may impose regional property taxes or surcharges, particularly in tourist areas. The Balearic Islands, for example, applies a tourist tax that affects vacation rental properties, while Catalonia has specific urban planning surcharges in certain municipalities.
Coastal municipalities often charge additional fees for beach maintenance, harbor services, or environmental protection programs. These can range from €30-200 annually depending on property location and local services provided.
Community fees (gastos de comunidad) for apartment buildings or urbanizations are separate private charges, typically ranging from €50-300 monthly, covering shared facility maintenance, security, and administration costs.
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What deadlines and payment methods are available for paying these yearly property taxes in Spain?
Spanish property tax deadlines and payment methods vary by tax type and municipality, with most annual obligations due in the final quarter of each year.
| Tax Type | Payment Deadline | Available Payment Methods |
|---|---|---|
| IBI Property Tax | September-November (varies by municipality) | Bank transfer, direct debit, online payment, municipal offices |
| IRNR Annual Return | December 31st | Online (AEAT website), tax advisor, bank transfer |
| IRNR Quarterly (rental income) | 20th of Jan, Apr, Jul, Oct | Online filing, authorized representatives, bank payment |
| Wealth Tax | June 30th (following tax year) | Online, tax advisor, authorized bank branches |
| Municipal Surcharges | Varies by municipality | Combined with IBI or separate billing |
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.
Understanding these annual tax obligations is crucial for budgeting your Spanish property investment effectively.
Professional tax advice becomes particularly valuable for non-EU residents and high-value property owners facing complex filing requirements and higher tax rates.
Sources
- Health Plan Spain - IBI Property Tax Guide 2025
- Spain Costas - Understanding IBI Tax
- Prime Invest - What is IBI Property Tax
- MCB Costa Blanca - IBI Calculation Guide
- Iberian Tax - IBI Tax Comprehensive Guide
- Connect Houses - IBI Guide for Real Estate Investors
- Lodger In - Finding Cadastral Reference
- Iberian Tax - Cadastral Value Guide
- Health Plan Spain - IBI Tax Rates by Region
- PTI Returns - Spain IBI Tax and Implied Income Guide