Property-Related Taxes in Spain

Nonresident individuals are generally taxable in Spain only on Spanish-source income, including rental income and capital gains derived from Spanish real estate.

Rental Income Tax

Rental income earned by a nonresident individual from Spanish property is subject to Spanish Non-Resident Income Tax (IRNR).

For residents of another EU member state or qualifying EEA country, rental income is generally taxed at 19% of net taxable income. Qualifying expenses directly connected with earning the rental income can generally be deducted.

For other nonresident individuals, the general rate is 24%. Under the currently published rules, these taxpayers generally cannot deduct ordinary rental expenses, meaning the tax is normally calculated on gross rental income.

Accordingly, the tax treatment can differ substantially depending on the landlord's country of tax residence.

For a non-EU/EEA nonresident individual, annual gross rental income of €18,000, €72,000 and €144,000 results in estimated Spanish rental income tax of €4,320, €17,280 and €34,560, respectively. This is based on the general 24% tax rate on gross rental income.

For a qualifying EU/EEA nonresident, rental income is generally taxed at 19% of net taxable income. Assuming qualifying deductible expenses equal to 30% of gross rent for comparison purposes, taxable rental income would be €12,600, €50,400 and €100,800, producing annual income tax of €2,394, €9,576 and €19,152, respectively.

This produces an effective tax burden of 24% of gross rent for a non-EU/EEA investor and approximately 13.3% of gross rent for a qualifying EU/EEA investor under the assumed 30% expense level.

The 30% expense assumption is illustrative and is not a statutory Spanish deduction. Actual deductible expenses determine the final taxable rental income.

Imputed Income Tax

A nonresident individual owning Spanish residential property that is not rented out can be subject to imputed income tax for the period during which the property is available for the owner's use.

The deemed income is generally calculated as 1.1% or 2% of the property's cadastral value, depending on the applicable cadastral valuation rules.

The resulting deemed income is generally taxed at 19% for qualifying EU/EEA residents and 24% for other nonresidents.

For a property rented for only part of the year, rental income tax generally applies to the rented period and imputed income tax can apply proportionately to the unrented period.

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 Tax

The standard Spanish corporate income-tax rate is 25%.

For tax periods beginning in 2026, qualifying micro-enterprises with previous-year net turnover below €1 million are generally subject to:

• 19% on the first €50,000 of taxable income; and

• 21% on taxable income above €50,000.

Qualifying small and medium-sized enterprises are generally subject to a 23% rate in 2026.

The reduced rates are subject to eligibility requirements and generally do not apply to entities classified as equity companies.

Rental income earned through an ordinary taxable company is generally included in corporate taxable income, with qualifying expenses deductible subject to Spanish corporate tax rules.

Capital Gains Tax

A nonresident individual's capital gain from the disposal of Spanish real estate is generally subject to tax at 19%.

The taxable gain is broadly determined by reference to the difference between the transfer value and the tax-recognized acquisition value, taking into account qualifying acquisition and disposal costs and other applicable adjustments.

When a nonresident sells Spanish real estate, the purchaser is generally required to withhold 3% of the purchase price and pay it to the Spanish tax authorities. This 3% withholding is an advance payment toward the seller's final tax liability, rather than an additional 3% capital-gains tax.

Special transitional rules can apply to qualifying assets acquired before 31 December 1994.

Property Buying Costs and Transaction Taxes in Spain

Annual Property Tax – IBI

Spain imposes an annual municipal property tax known as Impuesto sobre Bienes Inmuebles (IBI).

IBI is calculated on the property's cadastral value, rather than its current market value. The applicable rate is determined by the municipality.

For urban real estate, the statutory municipal framework generally starts at approximately 0.4% of cadastral value, although the actual rate can be higher depending on the municipality and applicable local rules.

Because cadastral values are often different from current market values, the IBI rate should not be interpreted directly as the same percentage of the property's purchase or market value.

Net Wealth Tax

A nonresident individual can also be subject to Spanish Wealth Tax (Impuesto sobre el Patrimonio) on qualifying assets and rights located in Spain.

The tax is imposed on net taxable wealth, meaning qualifying liabilities can generally reduce the taxable base subject to the applicable rules.

Under the state framework, a general €700,000 tax-free allowance applies, although the precise treatment can depend on the applicable autonomous-community rules.

Where the state scale applies, progressive rates range from 0.2% to 3.5%.

The valuation of real estate for Wealth Tax purposes follows statutory valuation rules and is not necessarily identical to its current market value.

Very high net wealth can also fall within Spain's Solidarity Tax on Large Fortunes, which has become a permanent part of the Spanish tax system. This tax generally targets net wealth exceeding €3 million, with mechanisms designed to coordinate it with Wealth Tax.

Urban Land Appreciation Tax – IIVTNU

A disposal of urban real estate can also trigger the municipal Tax on the Increase in Value of Urban Land (IIVTNU), commonly referred to as municipal plusvalía.

This is separate from the national 19% capital-gains tax.

The liability is based principally on the increase attributable to the land component of the property and is determined under municipal rules. The applicable municipal tax rate can be as high as 30% of the IIVTNU taxable base.