Taxes are one of the biggest surprises for first-time buyers in Spain. On top of the purchase price, you can expect to pay between 10% and 14% in total taxes and fees depending on whether the property is new or resale. This guide explains every tax clearly, with real examples based on typical Costa Blanca prices.
Tax laws change. Always verify figures with a qualified Spanish tax adviser (gestor or asesor fiscal) before completing any purchase. The rates below are correct for Valencian Community as of January 2025.
1. Taxes when you buy
These are one-off taxes paid at the time of purchase. They vary significantly depending on whether you buy a new build (from a developer) or a resale property (from a private owner).
Resale properties — ITP (Transfer Tax)
If you buy a second-hand property, you pay ITP (Impuesto de Transmisiones Patrimoniales) — Transfer Tax. In the Valencian Community (which covers all of Costa Blanca and Valencia), the rate is a flat 10% of the purchase price.
| Purchase price | ITP rate (Valencia) | Tax payable |
|---|---|---|
| €250,000 | 10% | €25,000 |
| €500,000 | 10% | €50,000 |
| €800,000 | 10% | €80,000 |
| €1,200,000 | 10% | €120,000 |
Spain and the Netherlands, Germany, Belgium and the UK all have double taxation treaties. This means you generally will not pay transfer tax twice on the same property purchase.
New build properties — VAT + Stamp Duty
If you buy directly from a developer (obra nueva), you pay VAT instead of ITP:
- IVA (VAT): 10% of the purchase price for residential properties
- AJD (Stamp Duty / Actos Jurídicos Documentados): 1.5% of the purchase price in Valencian Community
- Total on new build: approximately 11.5%
Notary and Land Registry fees
These are not taxes but mandatory costs you must budget for:
- Notary fees: approximately 0.2% – 0.5% of purchase price (regulated by law)
- Land Registry (Registro de la Propiedad): approximately 0.1% – 0.3%
- Legal / gestoria fees: €1,500 – €3,000 typically
2. Annual property taxes
Once you own property in Spain, two annual taxes apply regardless of whether you live there or not:
IBI — Local property tax
IBI (Impuesto sobre Bienes Inmuebles) is the Spanish equivalent of council tax or the Dutch OZB. It is charged by the local municipality and calculated on the valor catastral (cadastral value) of the property — which is typically well below market value.
For a typical €500,000 villa on the Costa Blanca, annual IBI is usually between €600 and €1,800 depending on the municipality and cadastral value. Jávea, Moraira and Altea tend to be in the mid-range.
Basura (rubbish collection tax)
A separate small municipal charge for waste collection. Typically €80 – €200 per year. Sometimes included in IBI, sometimes billed separately.
3. Non-resident income tax (IRNR)
This is the tax that surprises most foreign buyers. If you are not a Spanish tax resident, you must pay IRNR (Impuesto sobre la Renta de No Residentes) every year — even if you do not rent out your property.
If you do NOT rent out the property
Spain applies an imputed income — a fictional rental income — to second homes owned by non-residents. This is calculated as:
- 2% of the cadastral value (or 1.1% if the value has been updated in the last 10 years)
- Tax rate: 19% for EU/EEA residents (Dutch, German, Belgian, British post-Brexit: 24%)
In practice, this typically amounts to €200 – €800 per year for a standard villa. It must be filed annually using Form 210.
Since 1 January 2021, UK citizens are no longer EU residents for Spanish tax purposes. This means British buyers pay IRNR at 24% instead of 19%, and face slightly less favourable capital gains treatment. British buyers should factor this into their cost calculations.
If you DO rent out the property
Rental income from Spanish property is taxable in Spain. EU residents can deduct allowable expenses (mortgage interest, maintenance, management fees, IBI, insurance) and pay 19% on net rental income. Non-EU residents pay 24% on gross income with no deductions.
4. Taxes when you sell
When you eventually sell, two taxes apply:
Capital Gains Tax (CGT)
The profit from the sale (sale price minus original purchase price plus improvement costs) is subject to capital gains tax:
- EU residents: 19% on capital gains
- Non-EU residents: 24% on capital gains
Important: the buyer is required by law to retain 3% of the purchase price and pay it directly to the Spanish tax authority as a deposit against the seller's potential CGT liability. If your actual tax is less, you can claim the difference back.
Plusvalía Municipal
This is a municipal tax on the increase in land value since you bought it. It is calculated on the cadastral value (not market value) and the number of years you have owned the property. After a 2021 Supreme Court ruling, the tax is only payable if there has been a genuine increase in value. Typically amounts to €1,000 – €8,000 for most transactions.
5. Example: total purchase costs for a €500,000 resale villa in Jávea
Purchase cost breakdown
As a rule of thumb: budget 11-12% on top of the purchase price for a resale property in the Valencian Community.
6. NIE — the essential first step
Before you can buy property in Spain, you need a NIE (Número de Identidad de Extranjero) — a personal tax identification number for foreigners. Without it, you cannot sign a purchase deed, open a Spanish bank account or pay Spanish taxes.
How to get your NIE
- Apply in person at a Spanish consulate in your home country (Netherlands: consulate in Amsterdam or The Hague), or
- Apply in person at a Foreigners' Office (Oficina de Extranjeros) in Spain — in Alicante or Valencia for the Costa Blanca area
- A Spanish lawyer can apply on your behalf with a power of attorney (strongly recommended)
- Processing time: 2–8 weeks depending on method
- Cost: approximately €12 in fees
The NIE process takes time. Many experienced buyers apply for their NIE on their first visit to Spain, before they have even found a property they want to buy. This avoids delays when you find the right property and need to move quickly.
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