What buyers pay on the Costa del Sol: taxes and costs
Buying property on the Costa del Sol comes with taxes and costs on top of the price, and then some yearly taxes as an owner. None of it is complicated once you know the numbers. This guide covers what you pay when you buy, what you pay each year, and what happens if you rent the property out. Rates and allowances change and depend on your situation, so use a qualified tax adviser before you buy.
Taxes when you buy
What you pay on purchase depends on whether the property is a resale property or a new build.
For a resale property in Andalucia you pay transfer tax, ITP, at around 7 percent of the price. For a new build bought from a developer you pay VAT, IVA, at 10 percent, plus stamp duty, AJD, at around 1.2 percent.
On top of the tax, budget for notary, land registry and legal fees. In total plan for around 9 to 10 percent of the price on a resale and 12 to 14 percent on a new build, with the top of each range including mortgage costs.
- Resale properties: ITP transfer tax around 7% in Andalucia
- New build: IVA 10% plus AJD stamp duty around 1.2%
- Add notary, registry and legal fees
- Total buying costs are usually 9 to 14% of the price
Taxes when you own
Each year you pay IBI, the local council tax, based on the cadastral value of the property and usually a small percentage of it.
If you rent it out
If you rent the property to guests or tenants, the income is taxable in Spain and you must declare it, usually on tax form 210.
EU and EEA residents are taxed at around 19 percent and can deduct allowable expenses such as mortgage interest, repairs and community fees, so tax is on the net profit. Non-EU residents have generally paid 24 percent, with deduction rules that keep changing.
- Rental income must be declared, usually on form 210
- EU/EEA: around 19% on net income after allowable costs
- Non-EU: around 24%, with changing deduction rules
This page is general information, not tax advice. Spanish tax rates and regional allowances change often, and your position depends on your nationality, income and how you use the property. The figures here are approximate. Always use a qualified Spanish tax adviser before you buy or make any decision.
Common questions about taxes and costs
What are the total costs of buying property in Spain?
On top of the price, plan for around 9 to 10 percent on a resale and 12 to 14 percent on a new build in taxes and costs. This is transfer tax on a resale property (around 7 percent in Andalucia) or VAT at 10 percent plus stamp duty of around 1.2 percent on a new build, along with notary, registry and legal fees.
Do I pay tax if I do not rent my property out?
Yes. Non-residents pay a yearly non-resident imputed income tax, which treats an empty second home as producing a small notional income based on the cadastral value. You also pay IBI, the annual local council tax.
What is the difference in tax between resale properties and new builds?
A resale property carries transfer tax (ITP), around 7 percent in Andalucia. A new build from a developer carries VAT (IVA) at 10 percent plus stamp duty (AJD) at around 1.2 percent. Notary, registry and legal fees apply to both.
How is rental income taxed?
Rental income is declared in Spain, usually on form 210. EU and EEA residents pay around 19 percent on net income after allowable costs. Non-EU residents have generally paid 24 percent, with deduction rules that keep changing.
Is there a wealth tax?
There can be, on high-value assets, with a general allowance of around 700.000 euros per person before it applies. Regions set their own rules and allowances, so check your position with an adviser.
The mechanics, in full detail:
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