Annual Property Costs in Spain: Owners Guide 2026

Annual property costs in Spain : Owners Guide 2026.

Annual tax obligations for resident and non-resident owners — Costa del Sol 2026

Sources: Spanish Tax Agency (AEAT), Junta de Andalucía, Non-Resident Income Tax Act (RDL 5/2004), Personal Income Tax Act (Law 35/2006), Local Government Finance Act, Decree 28/2016 (holiday rentals, Andalusia).

Disclaimer: This guide is for informational purposes only. Figures and tax rates reflect the legal framework in force in 2026 and may change. Always consult a qualified tax advisor for your specific situation.

Buying a property in Spain is not the end of the tax process — it is the beginning of a set of annual tax obligations that vary significantly depending on how the property is used, the owner’s country of tax residence and whether the property generates rental income. This guide covers those obligations in full: the IBI council tax, taxation of a second home that is not rented out, and the complete tax treatment of rental income — both long-term and holiday lets.

This guide does not repeat the general concepts of the Spanish tax system — tax residency, IRNR rates, double taxation treaties — which are set out in full detail in: Property Buyer Taxes in Spain : 2026 Complete Guide. This guide goes straight to the mechanics: what is declared, when, how it is calculated and what can be optimised.

Map of Owner Tax Obligations

Tax obligations by property use and owner residency — Spain 2026

IBI — Council Tax

The IBI (Impuesto sobre Bienes Inmuebles) is the annual council tax paid by every property owner in Spain — resident or non-resident, individual or company — regardless of whether the property is rented, owner-occupied or vacant. It is calculated by applying the rate set by each local council to the cadastral value of the property. On the Costa del Sol, cadastral values are typically far below market prices: a property purchased for €1,500,000 may have a cadastral value of €250,000–€350,000, keeping the annual IBI in the €1,500–€2,500 range in most luxury-area cases.

IBI rates and example amounts — Costa del Sol municipalities (2026)

IBI Rebates and Practical Notes

• Solar energy or energy-efficiency installations: many Costa del Sol councils offer rebates of 10%–50% for several years. Check the specific requirements with each council.
• Direct debit payment: some municipalities offer discounts of 1%–5% on the bill.
• The IBI accrues on 1 January each year. If the property is sold during the year, it is customary to prorate the IBI between buyer and seller at the time of signing.
• If the cadastral value appears disproportionately high, it can be challenged before the Catastro with an independent valuation.

Second Home Not Rented Out — Deemed Rental Income

If you own a second home in Spain that you do not rent out, the law attributes a notional income calculated as 1.1% of the cadastral value — or 2% if the cadastral value has not been revised in the past ten years. That notional base is then taxed at your applicable IRPF or IRNR rate. This is not a tax that can be avoided: as long as you own a second home in Spain, the obligation exists even if the property generates no income whatsoever.

The deemed income charge only applies to days of the year when the property is available to you without being rented. If you rent the property for part of the year, the deemed income is calculated proportionally on the owner-use days only. Keeping an accurate record of the days rented can significantly reduce the deemed income base.

Deemed rental income calculation by owner profile — cadastral value €200,000, revised (2026)

The Impact of Brexit on British Owners

Since 1 January 2021, British citizens who are not tax resident in Spain moved from the 19% IRNR rate to 24%, and lost the right to deduct expenses from rental income. For deemed rental income, the increase in the annual bill is 26% — from €418 to €528 in the example above. For rental income the impact is far greater because they now pay tax on gross income with no deductions, whereas previously they paid on net income with full deductions. Many British owners have evaluated Spanish tax residency or a company structure as alternatives to recover tax efficiency.

Taxation of Rental Income — Complete Regime

The difference between 19% on net income (EU non-resident) and 24% on gross income (non-EU non-resident) is in practice far greater than the nominal 5-percentage-point gap. If operating costs represent 35% of gross income — a typical figure for holiday lets with professional management — the EU non-resident’s effective rate on gross income is 12.35%, while the non-EU non-resident pays the full 24% on the same gross amount. Concrete example: a Marbella property generating €30,000 gross annual income with €10,000 in costs. The EU non-resident pays 19% × €20,000 net = €3,800. The non-EU non-resident pays 24% × €30,000 gross = €7,200. Same property, same income, nearly double the tax bill.

Rental income taxation — comparison by owner profile (2026)

Allowable Deductions for Residents and EU/EEA Non-Residents

• Maintenance and repairs to the property (not improvements, which are capitalised).
• Community of owners fee, including ordinary service levies.
• IBI council tax proportional to the period rented.
• Home insurance and rental default insurance.
• Estate agency or letting platform fees (Airbnb, Booking, VRBO, etc.).
• Tax management or accountancy fees for rental administration.
• Property depreciation: 3% per year on the construction value (land excluded).
• Mortgage interest if the property carries financing.
• Advertising, photography and listing maintenance costs.
• Utilities if included in the rental price.

Partial Rental — When the Property Is Both Used and Rented

If the property is rented for part of the year and available to the owner for the rest, two regimes coexist in the same tax declaration: income from the rented periods is taxed as rental income at the applicable rate, and the owner-use days generate a proportional deemed rental income charge. Expenses are deductible only in proportion to the days actually rented. For example, if the property is rented for 120 days and owner-occupied for 245 days, only 32.9% of the annual expenses can be deducted from rental income. Depreciation is split in the same proportion.

Holiday Rentals in Andalusia — Specific Requirements

Holiday letting in Andalusia requires prior registration with the Andalusian Tourism Register (RTA), regulated by Decree 28/2016. Registration is mandatory before listing the property on any platform. Technical requirements include direct ventilation to the outside in all rooms, heating and cooling systems, and a first aid kit, among others. The fine for letting without registration can reach €18,000.

From a tax perspective, holiday rental income is taxed in exactly the same way as long-term residential rental income: 19% for residents and EU/EEA non-residents on net income, and 24% for non-EU non-residents on gross income. There is no special tax regime for holiday lets as distinct from residential lets.

The Spanish Company (SL) for Rental — When It Makes Sense

Under Corporation Tax, the general rate is 25% (15% for the first two years) on net profit. All operating costs plus property depreciation can be deducted. For a non-EU non-resident who would otherwise pay 24% on gross income, the saving can be very significant. With costs at 35% of gross income, the company’s effective rate on gross income is 16.25%, versus 24% without a company.

Spanish company (SL) for property rental — cost-benefit analysis

The company structure makes sense for: non-EU non-residents with active rental income and significant operating costs, portfolios of three or more properties, or active investment projects. It is not recommended for: a single property used mainly for personal enjoyment, investors with EU residency who can deduct expenses individually at 19%, or owners with low management demands who do not justify the fixed overhead. The full tax analysis of the company as a purchase structure is covered in: Property Buyer Taxes in Spain : 2026 Complete Guide.

Non-Tax Recurring Costs

Typical annual costs for a property owner on the Costa del Sol

Frequently Asked Questions

How much is the annual IBI on a property in Marbella?

The IBI in Marbella is calculated by applying the municipal rate (approximately 0.58%) to the cadastral value of the property. For a property with a cadastral value of €200,000, the IBI would be around €1,160 per year. Cadastral values in Marbella are typically far below market prices: a property purchased for €1,000,000 may have a cadastral value of €150,000–€250,000, resulting in an annual IBI of between €870 and €1,450.

Do non-resident owners have to pay tax in Spain even if they don’t rent out their property?

Yes. Non-resident owners have two annual tax obligations even if the property generates no income whatsoever: the IBI council tax (like any owner) and the IRNR deemed rental income charge. This second obligation taxes a notional income equivalent to 1.1% of the cadastral value (or 2% if not revised in the past ten years). It is declared using Form 210 once a year. EU/EEA citizens pay 19% on that base; non-EU citizens pay 24%.

How much does a non-resident owner pay on rental income in Spain?

It depends on your country of residence. EU or EEA non-residents pay 19% on net income — after deducting costs such as community fees, IBI, insurance, maintenance, depreciation and management fees. Non-residents outside the EU (British citizens post-Brexit, Americans, Latin Americans, etc.) pay 24% on gross income with no deductions. Both file Form 210 on a quarterly basis.

What happens if I don’t file Form 210 as a non-resident owner?

Failure to file Form 210 is a tax infringement that can result in penalties of between 50% and 150% of the unpaid tax, plus late interest at 4.06% per year. The tax authority identifies non-compliance by cross-referencing Catastro and Land Registry data, and can open a regularisation proceeding for the last four non-statute-barred years. Voluntary self-correction before the authority acts reduces penalties to 10%–25% of the unpaid tax depending on the time elapsed.

Can I set up a company to pay less tax on rental income in Spain?

It can be advantageous in specific cases, particularly for non-EU non-residents with active rental income. A Spanish limited company (SL) pays Corporation Tax at 25% on net profit (15% for the first two years) and can deduct all operating costs and property depreciation. However, it adds recurring fixed management costs and has implications on disposal that must be analysed case by case with a specialist tax advisor.

Can the IBI council tax be deducted from rental income?

Yes, for residents and EU/EEA non-residents who pay tax on net income. The IBI is deductible proportionally to the days of the year the property is actually rented. If the property is rented for 150 days a year, 41% of the annual IBI is deductible. Non-EU non-residents cannot deduct IBI because they pay tax on gross income with no deductions.

Sources

• Spanish Tax Agency (AEAT) — aeat.es
• More information : Spanish Tax Agency
• Junta de Andalucía
• Non-Resident Income Tax Act (RDL 5/2004)
• Personal Income Tax Act (Law 35/2006)
• Local Government Finance Act
• Decree 28/2016 (holiday rentals, Andalusia)