Property taxes in Spain: Full guide for Americans

Spain's beautiful coastlines and relaxed lifestyle have drawn many Americans to buy property there. You may have already purchased your dream villa or are seriously considering it. Either way, understanding how property taxes in Spain work is important for your financial planning.

Spain has different types of property taxes, and how much you pay depends on a few factors, such as whether you're a Spanish resident or non-resident for tax purposes. Here's everything you need to know to stay on the good side of Spanish tax authorities.

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Table of contents
What are property taxes in Spain? What types of property taxes are there in Spain? How are property taxes calculated in Spain? How to pay property taxes in Spain? Penalties for not complying with property tax rules in Spain Frequently asked questions

What are property taxes in Spain?

Spain has multiple types of property taxes that kick in at different stages of ownership. You'll encounter taxes when you first buy your property in Spain, annual taxes while you own it, and additional taxes if you eventually decide to sell.

One aspect that catches many Americans off guard is Spain's approach to rental income taxation for non-residents. Even if you never rent out your Spanish property, the tax authorities will still assess an "imputed rental income," essentially taxing you on the theoretical rental value of your property.

Here's a breakdown of the different types of property taxes you'll have to pay in Spain:

Tax type	Rate¹²	When applied	Notes
Transfer tax (Impuesto sobre Transmisiones Patrimoniales - ITP)	6% to 10%	When buying resale properties	Rate varies by region Reduced rates are typically for Spanish residents only
VAT (Impuesto sobre el Valor Añadido - IVA)	10% (residential) 21% (land/commercial)	When buying new-build properties	Applied instead of the transfer tax for new properties
Stamp Duty (Actos Jurídicos Documentados - AND)	0.5% to 1.5%	When buying new-build properties	Paid in addition to VAT on new builds
Annual real estate tax	0.4% to 1.1%	Every year, while owning	Rate set by the local municipality based on assessed value
Non-resident income tax (Impuesto sobre la Renta de No Residentes - IRNR)	19% (EU residents) 24% (non-EU residents)	Every year, while owning	Applied to 1.1% of the assessed value, even if the property is not rented out
Wealth tax	Varies by region	Annually, if assets exceed 700,000 EUR	Only applies if total Spanish assets exceed the threshold
Capital gains tax	19% to 26% (EU residents) 24% (non-EU residents)	When selling property	Applied to the profit made on the sale
Plusvalía Tax	Varies by municipality	When selling property	Based on the increase in cadastral value during the ownership period

What types of property taxes are there in Spain?

Transfer tax

When you buy a resale property (one that's been previously owned), you'll pay a transfer tax called Impuesto sobre Transmisiones Patrimoniales or ITP. This tax can reach up to 10% of the property's value, but the exact rate depends on which region you're buying in. For example, in Madrid, the rate is 6%.¹²

VAT

For brand-new properties, you'll pay a VAT (Impuesto sobre el Valor Añadido or IVA) instead of the transfer tax. The rate is typically 10% for residential properties and 21% for land or commercial properties.²

You'll also need to pay stamp duty (Actos Jurídicos Documentados or AJD) on top of VAT, which ranges from 0.5% to 1.5% depending on where the property is located.²

Annual real estate tax

This works similarly to property taxes in the US. You'll pay between 0.4% and 1.1% of your property's assessed value each year.²

The exact rate depends on your local municipality, because some areas charge more than others. Your local town hall sets this rate and collects the payment.

Non-resident income tax

Spain has a tax called Impuesto sobre la Renta de No Residentes (IRNR) that applies to foreign property owners. The part that surprises many Americans is that you have to pay this tax every year, even if you never rent out your property.

The Spanish tax authorities calculate what they think your property could earn in rental income and tax you on that imaginary amount. Usually, this means taking 1.1% of your property's assessed value as the taxable rental income.²

Your tax rate depends on where you're from:²

• EU or EEA residents pay 19%
• Non-EU residents (including Americans) pay 24%

For example, if your property has an assessed value of 300,000 EUR, the taxable amount would be 3,300 EUR. As an American, you'd pay 792 EUR in non-resident income tax (3,300 EUR x 24%).

Wealth tax

If your Spanish property and other assets in Spain are worth more than 700,000 EUR, you might owe wealth tax.²

The rates and rules vary by region, and some areas offer exemptions or reduced rates.

Capital gains tax

When you sell your Spanish property, you'll pay tax on any profit you make.

EU/EEA residents pay between 19% and 26%, depending on how much profit they made. Non-EU residents (including Americans) pay a flat 24% rate.²

Plusvalía tax

This municipal tax hits you when you sell, based on how much the property's official cadastral value increased while you owned it. Each municipality sets its own rates, so the costs will vary significantly across Spain.

How are property taxes calculated in Spain?

For ongoing property taxes, Spain uses your property's assessed cadastral value as the starting point. This official value is usually a little lower than what you paid for the property.

For the annual real estate tax, your local municipality applies their rate (between 0.4% and 1.1%) to this assessed value.

For non-resident income tax, they take 1.1% of the assessed value, then apply your tax rate (24% for American non-residents). This happens whether you rent the property or not.²

If you do rent out your property, you'll pay tax on your rental income. The rates are the same: 24% for Americans who are non-residents, and 19% for EU residents.²

You may also need to pay for property management in Spain, which is an extra cost.

You become a tax resident of Spain if you live in the country for more than 183 days in a single year. In other words, you don't need to become a Spanish citizen—you just need to live in the country for more than 6 months out of the year.³

How to pay property taxes in Spain?

First, you'll need a NIE (Número de Identificación de Extranjero), which is your Spanish tax identification number. Every foreigner needs this number, and you should get it when you buy your property.

Without an NIE, you can't pay taxes or deal with the Spanish tax authorities.

When you're buying or selling property, your lawyer or mortgage broker will typically handle the purchase and sale taxes for you. But for ongoing taxes like the annual real estate tax and the non-resident income tax, you're responsible for paying them yourself.

Non-resident income tax returns are due by December 31 each year, and you file them through self-assessment. For annual real estate taxes, ask your municipality about when they're due since rules can vary.²

Most property taxes can be paid online through the Spanish tax authority's website or at local Spanish banks. A lot of the time, you can also set up automatic payments to avoid missing deadlines.

Penalties for not complying with property tax rules in Spain

If you don't pay your taxes on time, you'll face fines and interest charges. In severe cases, Spanish authorities can even seize your property to recover unpaid taxes. In other words, it's important to stay on top of your tax obligations to avoid any negative consequences.

Frequently asked questions

How much is the property tax in Spain?

Property taxes in Spain depend on the type of tax and your property's value.

For ongoing costs, expect to pay between 0.4% and 1.1% annually for real estate tax, plus a non-resident income tax of 24% of the 1.1% imputed rental income if you're a non-resident.²

When buying, you'll pay either 4% to 10% transfer tax on resale properties or a 10% VAT plus stamp duty on new builds. You'll only have to pay these taxes once.²

How to avoid property tax in Spain?

You can't legally avoid property taxes in Spain if you own property there.

These taxes are mandatory obligations that come with property ownership. Attempting to evade them can result in heavy fines, interest charges, and legal complications. A much better approach is to budget for these costs and pay them on time.

That said, certain exceptions may reduce your tax burden in Spain, but most of them are only open to Spanish tax residents. You become a Spanish tax resident if you spend more than 183 days there every year.³

How long can I live in Spain if I own a property?

Owning property in Spain doesn't give you any special residency rights. Spain ended its Golden Visa program for real estate purchases in 2025, so property ownership won't help you stay longer.⁴

With a US passport, you can visit Spain for up to 90 days within any 180 days as a tourist. After those 90 days, you must leave the Schengen area for at least 90 days before returning.⁵

If you want to live in Spain long-term, you'll need to apply for a proper visa or residency permit through the standard immigration process.

Do non-residents pay the property tax in Spain?

Yes, non-residents must pay several property taxes in Spain. You'll pay the annual real estate tax just like Spanish residents, plus the non-resident income tax on the theoretical rental value of your property, even if you never rent it out.

You're also subject to capital gains tax if you sell and wealth tax if your Spanish assets exceed 700,000 EUR (in most cases).²

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Owning property in Spain can be a wonderful investment, but it also comes with many different property tax obligations. You'll face transfer tax or VAT when buying, annual real estate tax and non-resident income tax while owning, and capital gains tax when selling.

However, managing these international property expenses becomes much easier when you can send money from the US to Spain and vice versa with low fees and no currency exchange rate markups when converting between USD and EUR.

Wise can help you get a better deal on currency conversion. You can convert over 40 currencies at the standard mid-market exchange rate, and we'll show you the fees upfront so you know exactly how much you're paying.

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Sources

1. Pacific Prime Latin America - Guide to Property Taxes for Non-Resident Citizens Buying Property in Spain
2. Idealista - Understanding property tax in Spain for foreigners
3. Property Tax International - Spanish Property Tax
4. Global Citizen Solutions - Golden Visa Spain
5. US Department of State - U.S. Travelers in Europe

Sources checked 09/12/2025