Tax Obligations for Home Owners in Spain

16.01.2025

Owning a property in Spain comes with a number of tax obligations, both for residents and non-residents. Below is a summary of the main taxes that may apply to you.

1. Property Tax (IBI - Impuesto sobre Bienes Inmuebles)

Every new-build property in Spain is subject to the municipal property tax, the IBI. This is an annual tax based on the cadastral value of the property. The rate varies from municipality to municipality and is usually between 0.4% and 1.3% of the cadastral value.

2. Non-Resident Income Tax (IRNR - Impuesto sobre la Renta de No Residentes)

If you own a property in Spain but are not a tax resident there, you will have to pay non-resident tax (IRNR) annually, even if you do not rent out the property. This is calculated as a percentage (usually 1.1% or 2% of the cadastral value), with the rate being 19% for EU citizens and 24% for non-EU citizens.

3. Resident Income Tax (IRPF - Impuesto sobre la Renta de las Personas Físicas)

If you are a tax resident in Spain and generate income from renting out property, you must declare this in your annual tax return. You can deduct certain expenses, such as maintenance and mortgage interest, which can reduce your tax burden. Bron: https://sede.agenciatributaria.gob.es/Sede/vivienda-otros-inmuebles/tributacion-arrendador-viviendas-otros-inmuebles/calculo-rendimiento-alquiler-inmueble/gastos-deducibles.html

4. Wealth Tax (Impuesto sobre el Patrimonio)

Spain charges wealth tax on net worth above a certain threshold, depending on the autonomous region in which the property is located. This can be an issue if you own multiple properties or have a high net worth.

5. Plusvalía (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana)

When selling your home, you pay a local tax on the increase in value of the land. The amount of this tax depends on the term of ownership and the municipal rates.

Importance of Compliance with Tax Obligations for Homeowners in Spain

Correct compliance with these obligations prevents fines and legal problems. It is therefore advisable to engage a specialized tax advisor who can help you meet your tax obligations in Spain.

Do you have questions about your tax obligations as the owner of a luxury property in Spain? Contact a financial or legal expert!