Property-Related Taxes in Spain

Non-resident foreigners are taxed in Spain only on income derived from Spanish sources. Married couples may file jointly or separately, depending on their marital property regime.

Rental income earned by non-residents is taxed at a flat rate of 19% for EU/EEA residents and 24% for non-EU/EEA residents, with deductible expenses allowed. Capital gains from property sales are taxed at a flat rate of 19%, subject to withholding at source. Spain also levies an imputed income tax on second homes, as well as a municipal urban land appreciation tax upon sale.

Corporate income is taxed at 25%, with reduced and gradually declining rates available for micro-enterprises and SMEs. Property transaction costs are relatively high, with roundtrip costs typically ranging from 10.5% to 20%. Annual property holding taxes include municipal real estate tax (IBI) and, in certain cases, net wealth tax.

Annual Property Tax

Net Wealth Tax (Impuesto sobre el Patrimonio)

Spain levies a net wealth tax on Spanish assets. Although the tax was effectively abolished through a 100% allowance in 2008, it was reactivated from 2015 onward. Rates vary by autonomous region.

Net Wealth Tax Rates (2026):

The taxable base is net wealth, calculated as Spanish assets minus documented liabilities. Property is valued at the highest of its cadastral value, the value assessed by tax authorities, or the acquisition price.

Real Estate Tax (IBI)

The municipal real estate tax (IBI) is levied annually on the cadastral value of property. Rates are generally around 0.4% for urban property and 0.3% for rural property, though municipalities may apply higher rates. IBI is deductible for income tax purposes and may be contractually passed on to tenants.

Urban Land Appreciation Tax (IIVTNU)

Non-residents are subject to the Urban Land Appreciation Tax on the increase in value of urban land upon sale. The taxable base is calculated using the cadastral land value and a coefficient based on the number of years the property was held (up to a maximum of 20 years). Municipalities set the applicable rate, which may be as high as 30%.

Income Tax (IRPF)

Spanish tax law categorizes income into several classes, including employment income, income from movable capital, income from immovable capital, business income, capital gains, and imputed income from properties that are not used as a primary residence.

Income earned by non-residents is generally taxed at a flat rate of 19% (EU/EEA residents) or 24% (non-EU/EEA residents), depending on tax residency.

Rental Income Tax

Rental income is classified as income from immovable capital.

For EU/EEA non-residents, rental income is taxed at a flat rate of 19% on net income.
For non-EU/EEA non-residents, rental income is taxed at a flat rate of 24%.

As of July 2025, income-generating expenses are deductible for both EU/EEA and non-EU/EEA non-residents. 

Rental income tax is typically withheld by the tenant or property manager.

Imputed Income Tax

Spain levies an imputed income tax on second homes and properties that are not rented out. The imputed income is calculated as 1.1% to 2% of the cadastral value of the property and taxed at 19% for EU/EEA non-residents and 24% for non-EU/EEA non-residents.

Local Income Tax/Income Tax Surcharge

Non-residents are required to pay an annual surcharge to the Chamber of Commerce, Industry, and Navigation. This surcharge is levied at progressive rates ranging from 0.75% (for income up to €60,101.21) to 0.01% (for income exceeding €24,040,484.18). The surcharge is deductible for income tax purposes.

Corporate Taxation in Spain

Income and capital gains earned by companies are generally subject to corporate income tax at a flat rate of 25%. Expenses incurred in the production of taxable income are deductible. Rental income received by companies is treated as business income and taxed at the corporate rate.

Spain applies reduced corporate tax rates for micro-enterprises and SMEs. From 2025 onward, the rates are gradually reduced. For micro-enterprises, taxable income up to €50,000 is taxed at 21% in 2025, 19% in 2026, and 17% from 2027 onward, while income above this threshold is taxed at 22% in 2025, 21% in 2026, and 20% from 2027 onward. SMEs benefit from a phased reduction from 24% in 2025 to 21% from 2028 onward.

These reduced rates are not available to equity companies, and group turnover must be considered when determining eligibility.

Capital Gains Tax (Impuesto sobre la Plusvalía)

Capital gains derived by non-residents from the sale of Spanish property are taxed at a flat rate of 19%. The taxable gain is calculated as the transfer price less the indexed acquisition cost, related expenses, and allowable depreciation.

For properties acquired before 31 December 1994 (and after 31 December 1986), inflation relief may apply, reducing the gain by 11.1% per year of ownership prior to that date.

A 3% withholding tax is generally applied by the buyer and paid to the Spanish tax authorities. Certain exemptions apply, including long-held properties acquired before 31 December 1996 under specific conditions.

Property Buying Costs and Transaction Taxes in Spain