Taxes aren’t the reason most people move to Costa del Sol, but understanding them is crucial whether you’re buying, selling, investing, or planning to live here long term. Spain’s system has its layers, but many parts are simpler and more affordable than expected, especially compared to other countries.
This guide focuses on the taxes that actually affect you as a property owner or buyer, keeping things clear and relevant.
If you want running fees and other costs, i wrote about them in my other guide HERE)
Annual Property Taxes (IBI & Garbage Fees)
IBI (Impuesto sobre Bienes Inmuebles) is Spain’s version of annual property tax, calculated based on the cadastral value, which is almost always much lower than market price.
• For an apartment, expect around €400–€600 per year
• For a villa, around €1,000–€2,500 per year
• Garbage collection fees (Basura) are usually under €200 per year
These taxes are simple to set up as automatic payments and rarely cause surprises.
Buying a Property: Taxes and Fees
Property taxes differ depending on whether you’re buying a resale or a new build.
Resale Property Example (€500,000):
• Transfer Tax (ITP at 7%): €35,000
• Lawyer Fees (approx. 1%): €5,000
• Notary & Registry (approx. 1%): €5,000
• Total: €45,000 in additional costs
New Build Property Example (€500,000):
• VAT (IVA at 10%): €50,000
• Stamp Duty (AJD at 1.2%): €6,000
• Lawyer, Notary & Registry: ~€10,000
• Total: Around 13–14% in additional costs
Selling a Property: Plusvalía Tax
Plusvalía is a local tax paid on the increase in the land’s value since you bought it, not the property itself.
Example:
Let’s say the land’s cadastral value when you bought was €50,000. After five years, your local coefficient is 0.20.
• €50,000 x 0.20 = €10,000 taxable
• Local rate of 30% = €3,000 due
It’s usually paid by the seller, but negotiable during the deal.
Non Resident Taxes (Modelo 210)
If you own a property in Spain but don’t rent it out, you’re still required to file Modelo 210 annually. This is a small, automatic tax based on the cadastral value.
• Usually comes out to around €200–€500 per year
• Paid even if the property sits empty
If you rent it out, other rules and rates apply, so it’s best to get help early.
Capital Gains Tax on Property Sales (Non Residents)
If you’re a non resident and you sell a property in Spain, capital gains are typically taxed at:
• 19% on the profit
• Selling costs and documented improvements are deductible
This applies in most standard cases. Some exceptions and specific situations exist, so professional guidance is essential here.
Wealth and Solidarity Tax (for High Net Worth Individuals)
Andalucía has eliminated the standard Wealth Tax for residents, but non residents or those with high value assets may still be affected.
There’s also a new Solidarity Tax at the national level for individuals with over €3 million in net assets.
• 1.7% to 3.5% based on asset level
• Applies primarily to ultra high net worth individuals
Thinking of Working or Opening a Business
If you’re considering becoming self employed (autónomo) or opening a company in Spain, taxes and social security contributions depend heavily on your income, structure, and activities.
• New autónomos may benefit from reduced social security rates, but this isn’t automatic
• Limited companies (SL) generally pay corporate tax around 25%, with lower rates possible in early years
• Deductions, quarterly payments, and reporting are complex and require setup
Bottom line: the best path depends on your income and business model. Don’t wing it, speak to a good advisor.
If you plan on buying property in Spain you need to check out our buying process guide.
Other Taxes You Might Encounter
• Inheritance & Gift Tax: In Andalucía, direct relatives like spouses or children benefit from generous reductions, often reducing tax to nearly zero.
• Vehicle Registration & Road Tax: Registration tax depends on emissions. Annual road tax (IVTM) varies by municipality and car horsepower, often €50–€200.
• Digital Nomad Taxation: New remote workers under the digital nomad visa may qualify for reduced tax rates on foreign income (24% flat up to €600,000), under certain conditions.
Make sure you review our total cost of owing property guide for Costa del Sol.
Double Taxation Treaties
Spain has agreements with many countries to avoid double taxation. That means income you earn abroad (and already pay tax on) may be exempt or credited when filing in Spain.
Make sure to review this with a professional, especially if you have passive income, pensions, or investment accounts abroad.
Recommended Accountant in Costa del Sol
If you want to avoid problems and make smart decisions early, I always recommend Javier Gijón at GV Asesores. Calling him an accountant right as he is a fully fledged lawyer and tax expert.
He’s helped many of my clients navigate taxes when buying, selling, or relocating here, saving them time, stress, and in many cases, money. Whether it’s Modelo 210 or structuring your income as autónomo or SL, he’s the one I trust.
Spain’s tax system doesn’t need to be scary. With the right help, you can avoid pitfalls and handle your obligations confidently. The key is not relying on Google or guesswork. Know what applies to you and get local advice when you need it.
That way, you can spend more time enjoying the lifestyle, and less time worrying about the paperwork.