Complete tax framework: taxes at purchase, during ownership, on rental income and on sale — Costa del Sol 2026
Sources: Spanish Tax Agency (AEAT), Junta de AndalucĂa — Ministry of Finance, Ministry of Finance of Spain, Personal Income Tax Act (Law 35/2006), Non-Resident Income Tax Act (RDL 5/2004), Wealth Tax Act 19/1991, Law 11/2021 on measures against tax fraud.
Disclaimer: This guide is for informational purposes only and does not constitute professional tax advice. The Spanish tax system is complex and subject to change. Each tax situation is unique and depends on residency status, ownership structure and individual investment strategy. We recommend working with a qualified tax advisor in Spain and, where applicable, in your home country.
Buying a property in Spain — especially on the Costa del Sol — is a decision that goes far beyond the purchase price. The Spanish tax system establishes obligations at four distinct stages of the property lifecycle: at the point of purchase, during ownership, if rental income is generated, and at the time of sale or inheritance. Understanding this complete tax map before buying is not optional: it is the foundation of any well-informed investment decision.
The system operates simultaneously at three administrative levels — national, regional and municipal — and applies radically different treatment depending on the owner’s tax residency status. An American, British, German or Latin American buyer who is not tax resident in Spain does not pay tax in the same way as a resident: the applicable rates differ, the expenses that can be deducted differ, and the filing obligations differ.
Andalusia also offers specific tax advantages that distinguish it from other Mediterranean regions: the ITP transfer tax rate of 7% is one of the lowest in Spain, the Wealth Tax is fully exempt (100% rebate), and Inheritance Tax is practically negligible for direct family members. For buyers comparing different areas of Spain, these differences can represent tens or even hundreds of thousands of euros over the period of ownership.
Key taxes for the property buyer in Spain — full lifecycle (2026)
| Tax | When | Rate / Reference | Administered by |
|---|---|---|---|
| VAT — IVA (new build) | Purchase | 10% residential / 21% standalone garage | AEAT (national) |
| Transfer Tax — ITP (resale) | Purchase | 7% in Andalusia | Junta de AndalucĂa |
| Stamp Duty — AJD | Purchase | 1.2% in Andalusia | Junta de AndalucĂa |
| Council Tax — IBI | Ownership (annual) | 0.3%–1.1% of cadastral value | Local Council |
| IRNR — deemed rental income | Ownership (annual) | 19% EU / 24% non-EU on 1.1% of cadastral value | AEAT |
| IRPF / IRNR (rental income) | Ownership — if renting | 19%–47% residents / 19% EU non-residents / 24% non-EU | AEAT + Regional Government |
| Wealth Tax | Ownership (annual) | 0% in Andalusia (100% rebate) | Regional Government |
| Solidarity Tax — ISGF | Ownership (annual) | 1.7%–3.5% on net wealth >€3.7M | AEAT (national) |
| Capital Gains Tax (IRPF/IRNR) | Sale | 19%–28% residents / 19% non-residents (flat rate) | AEAT + Regional Government |
| Municipal Land Value Tax — PlusvalĂa (IIVTNU) | Sale | Based on increase in cadastral land value | Local Council |
| Inheritance Tax — ISD | Inheritance | Andalusia: 99% reduction for direct family members | Regional Government |
Tax residency is the central axis of the Spanish tax system for property owners. It has nothing to do with nationality or where the property is located: it is about where the owner pays tax as an individual. A German buyer who spends more than 183 days a year in Spain becomes a Spanish tax resident and is taxed accordingly. A British buyer who only comes for the summer remains a non-resident for tax purposes and is subject to an entirely different regime.
Spanish tax residency is triggered when at least one of three criteria is met: spending more than 183 days in Spain during the calendar year, having the main centre of economic activities or professional interests in Spain, or having a non-legally-separated spouse or minor children habitually residing in Spain. These criteria are alternative — just one is enough.
Key tax differences by residence status — property buyer in Spain (2026)
| Form / Tax concept | Tax resident in Spain | Non-resident — EU / EEA | Non-resident — outside EU (UK, USA, LATAM…) |
|---|---|---|---|
| Tax base | Worldwide income | Spanish-source income only | Spanish-source income only |
| Form 100 — IRPF Annual income tax return |
Yes — June each year | Not applicable | Not applicable |
| Form 210 * — Imputed income Property not rented out |
Not applicable | 19% on 1.1% of cadastral value — annual | 24% on 1.1% of cadastral value — annual |
| Form 210 * — Rental income If the property is rented out |
19%–47% on net income (IRPF Form 100) | 19% on net income — quarterly or annual | 24% on gross income — quarterly or annual |
| Form 210 * — Capital gain On sale of the property |
19%–28% savings tax scale (IRPF Form 100) | 19% flat rate — within 4 months of signing | 19% flat rate — within 4 months of signing |
| 3% withholding when buying from a non-resident | Not applicable when buying | Buyer withholds 3% of the price if the seller is a non-resident | Buyer withholds 3% of the price if the seller is a non-resident |
| IBI — Municipal property tax | Yes — annual | Yes — annual | Yes — annual |
| Wealth Tax | Worldwide assets — Andalusia 0% | Spanish assets only — Andalusia 0% | Spanish assets only — Andalusia 0% |
| Solidarity Tax (ISGF) | Worldwide assets if >€3.7M net | Spanish assets only if >€3.7M | Spanish assets only if >€3.7M |
| Form 720 — Assets held abroad | Yes, if foreign assets >€50,000 | Not applicable | Not applicable |
| Inheritance Tax | Andalusia: 99% reduction for direct family | Andalusia: 99% reduction for direct family | Andalusia: 99% reduction for direct family |
* Form 210 is the single tax return for non-residents in Spain (IRNR — Non-Resident Income Tax). It can be filed multiple times in the same year for different taxable events. Imputed income and rental income are mutually exclusive for the periods in which the property is rented out.
Regional governments in Spain have the power to apply their own rebates and reductions to devolved taxes. Andalusia has consistently used this power to position itself as one of Spain’s most tax-competitive regions. The three most relevant advantages for property buyers are the 7% ITP transfer tax — lower than Catalonia, Valencia and the Balearic Islands, which charge 10%–11% — the 100% Wealth Tax exemption, and the 99% Inheritance Tax reduction for direct family members. On a €1,000,000 resale property, the ITP difference versus the Balearics alone amounts to a €40,000 saving at the time of purchase.
When completing the purchase, the buyer must cover the main acquisition tax — VAT for new builds, ITP for resale properties — plus stamp duty (AJD) and professional fees for notary, land registry and solicitor. The total adds between 10% and 14% to the purchase price, depending on the type of property.
Summary of acquisition costs in Andalusia — new build vs. resale (2026)
| Item | New build | Resale | Notes |
|---|---|---|---|
| VAT / Transfer Tax (IVA / ITP) | 10% | 7% | Never applied simultaneously — one or the other |
| Stamp Duty (AJD) | 1.2% | 1.2% | Always applies in both cases |
| Notary + Land Registry | ~0.5%–0.9% | ~0.5%–0.9% | Official regulated fees |
| Solicitor’s fees | ~1% + VAT | ~1% + VAT | Essential for non-resident buyers |
| TOTAL ESTIMATED | ~12.7%–14% | ~9.7%–11% | On the purchase price |
For a full breakdown with concrete examples at €500,000 and €1,000,000 — including the regional ITP comparison, solicitor fees by price range, the notarial process and the pre-signing documentation checklist — see our detailed guide: Property Purchase Costs in Andalusia — Guide with Examples.
Since Law 11/2021, the tax authority uses the cadastral reference value as the minimum tax base for ITP. If the declared purchase price is lower than that value, the transfer tax is calculated on the reference value — not the agreed price — generating a supplementary tax assessment. In high-demand areas such as Marbella or Sotogrande, where market prices have grown faster than cadastral updates, the reference value is often below the market price, which causes no issue. In other areas the reverse may apply. Your solicitor must check the cadastral reference value before signing.
The IBI (Impuesto sobre Bienes Inmuebles) is the annual council tax paid by every property owner in Spain — resident or not, and regardless of whether the property generates income. It is calculated by applying the rate set by each local council — between 0.3% and 1.1% — to the cadastral value of the property. On the Costa del Sol, cadastral values are typically far below market prices: a €1,000,000 property may have a cadastral value of €150,000–€250,000, resulting in an annual IBI of between €800 and €2,000 in most municipalities. For exact figures by municipality and available rebates, see our guide: Taxes and Costs of Owning Property in Spain.
One of the aspects of the Spanish tax system that most surprises international buyers is the deemed rental income charge (imputación de rentas). If you own a second home in Spain that you do not rent out — you simply have it available without generating income — the law still attributes a notional income equivalent to 1.1% of the cadastral value (or 2% if the cadastral value has not been revised in the past ten years). That deemed income is taxed at your applicable IRPF or IRNR rate. For a non-resident with a property with a cadastral value of €200,000, the annual bill ranges from €418 (EU resident, at 19%) to €528 (non-EU, at 24%). This is an obligation that many non-resident owners are unaware of for years, accumulating penalties that can far exceed the original tax due.
Andalusia provides a 100% rebate on the Wealth Tax, resulting in an effective rate of 0%. However, the obligation to file a declaration remains if net wealth exceeds €2,000,000 (even if the resulting tax is zero). Additionally, the Solidarity Tax on Large Fortunes (ISGF) — created in 2022 as a complementary national tax — cannot be rebated by regional governments. It applies to net assets above approximately €3.7 million (€3,000,000 threshold plus a €700,000 personal exemption), at rates of 1.7% to 3.5% depending on the bracket. For luxury property buyers with significant overall wealth, this tax must be factored into the investment return analysis.
Wealth Tax and Solidarity Tax — position in Andalusia (2026)
| Tax | Effective threshold | Rate in Andalusia | Tax base for non-residents |
|---|---|---|---|
| Wealth Tax | Filing required if net wealth >€2,000,000 | 0% (100% rebate) | Spanish assets only |
| Solidarity Tax (ISGF) | Tax due if net wealth >~€3,700,000 | 1.7%–3.5% by bracket | Spanish assets only |
If you decide to rent the property — whether for long-term residential or holiday lets — the applicable tax regime depends directly on your residency status. 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. On a property generating €30,000 per year with €10,000 in operating costs, the EU non-resident pays €3,800 while the non-EU non-resident pays €7,200 — almost double for the same property with the same income.
For full details on rental taxation — rates by profile, allowable deductions, Form 210 deadlines, the holiday rental regime under Decree 28/2016 and the Spanish limited company (SL) as an alternative structure — see: Taxes and Costs of Owning Property in Spain.
When the property is sold, the difference between the transfer value and the acquisition value — both calculated in a specific way — generates a capital gain subject to tax. The acquisition value includes the purchase price plus all costs incurred: ITP or VAT, notary, land registry, solicitor fees, and any documented renovations or improvements. Correctly recording all these costs can significantly reduce the taxable base.
For Spanish tax residents, the gain is taxed on the savings scale: 19% up to €6,000, 21% from €6,000 to €50,000, 23% from €50,000 to €200,000, and 28% above that. For non-residents, the rate is a flat 19% regardless of the amount of the gain. Additionally, when the seller is a non-resident, the buyer is legally required to withhold 3% of the declared sale price and pay it to the tax authority within 30 days of signing. This withholding is an advance payment against the seller’s IRNR liability: if the actual tax due is less than the amount withheld, the seller can apply for a refund using Form 210.
At the time of sale, the municipal land value tax (plusvalĂa / IIVTNU) also arises — a local council tax on the increase in the cadastral value of the land since the last transfer. Its amount depends on the municipality, the cadastral land value and the number of years of ownership. Since 2021, if the property is sold at a loss or with no real increase in value, this can be demonstrated to the council to avoid the charge.
Andalusia offers extraordinarily favourable conditions for Inheritance Tax among direct family members. The combination of a €1,000,000 exemption per heir and a 99% reduction on the resulting liability means the effective tax burden is below 0.5% of the inherited value in the vast majority of cases. For inheritances between direct family members (spouse, children, parents) below €1,000,000 per heir, the tax may be effectively zero. This advantage contrasts sharply with regions such as Catalonia or the Balearic Islands, where rates can reach 34% without significant reductions.
For buyers with significant assets or those planning to pass property to their heirs, the difference between buying in Andalusia and in other Spanish or European regions can run into hundreds of thousands of euros over the period of ownership. Succession planning should be integrated from the outset into the investment structure.
Spain has double taxation treaties with more than 90 countries, including the USA, UK, Germany, France, the Netherlands, Switzerland and most of Latin America. These treaties establish which country has the primary right to tax each type of income and allow tax credits for taxes already paid in the other country. In practice, for properties located in Spain, Spain has taxing priority over both rental income and capital gains on sale. The credit for taxes paid in Spain can be offset against the tax liability in the country of residence, although the correct application of these treaties requires specialist international tax advice.
Some investors consider acquiring property through a Spanish private limited company (Sociedad Limitada / SL). Under Corporation Tax, the general rate is 25% (15% for the first two years) on net profit, allowing all operating expenses and the property’s depreciation to be deducted. For a non-EU non-resident who would otherwise be taxed at 24% on gross income with no deductions, the saving can be very significant.
However, the company structure is not suitable for all profiles. It adds recurring fixed management costs — accounting, filings, administration — and presents an important pitfall on disposal: if the company holds a single property and the shares are sold, the transaction may be subject to ITP as if it were a direct property transfer. The SL structure is most appropriate for portfolios of three or more properties, for non-EU non-residents with active rental income, or for active investment projects. Specialist advice is essential before deciding on the structure.
More information: Spanish Tax Agency.
Spanish tax residency is triggered when at least one of three criteria is met: spending more than 183 days in Spain during the calendar year, having the main centre of economic or professional interests in Spain, or having a non-legally-separated spouse or minor children habitually residing in Spain. One criterion is enough. Once you become a tax resident, your tax base becomes worldwide income — not just Spanish income — rental income is taxed under IRPF (rather than IRNR), and you gain access to deductions and tax benefits reserved for residents. The tax management becomes more complex, though in many cases the overall burden can be more efficient with proper planning.
Citizens of the USA, Mexico, Colombia, Argentina and other countries outside the EU or EEA who are not tax resident in Spain are taxed under IRNR at a flat 24% rate, with no possibility of deducting expenses on rental income. In practice this means: 24% on gross rental income with no deductions, 19% on capital gains on sale (same as any non-resident), an obligation to file Form 210 annually for deemed rental income if the property is not rented, and annual IBI as any other owner. For this profile, the Spanish SL company may be a more tax-efficient alternative, particularly if the property generates rental income with significant operating costs.
Since 1 January 2021, the UK left the EU and EEA. British non-resident owners in Spain moved from the 19% IRNR rate to 24%, and lost the right to deduct expenses from rental income — they now pay tax on gross income. For an owner who rents with operating costs representing 30% of gross income, the effective tax burden can more than double. This situation has led many British owners to consider Spanish tax residency or the company structure as alternatives.
For direct family members (spouse, children, parents), the tax burden in Andalusia is close to negligible. The €1,000,000 exemption per heir plus the 99% reduction on the resulting liability means the effective tax is below 0.5% of the inherited value in most cases. For inheritances between direct family below €1,000,000 per heir, the tax may be effectively zero. This advantage is one of the strongest arguments for structuring property investment in Andalusia versus other Spanish or European regions.
When purchasing a property from a non-resident seller in Spain, the buyer is legally required to withhold 3% of the declared sale price and pay it to the tax authority within 30 days of signing. This withholding is an advance payment against the seller’s IRNR liability on any capital gain. If the actual gain generates a lower tax than the amount withheld — or if there is a loss — the seller can apply for a refund of the excess using Form 210 within four months of the deed. As a buyer, this is not an additional cost to you: it is deducted from the amount you transfer to the seller. As a future seller, it is a mechanism to plan for in advance with your tax advisor.
