What taxes do you pay when buying a property in Spain? A 2024 guide for non-residents

A long list of property taxes can overwhelm you if you don't know what to expect when buying a property in Spain. 

Time to fix that! In this guide, we'll walk you through the essential info you need about property tax in Spain, making buying your Spanish dream home more transparent.

What taxes do non-residents pay when buying a property in Spain?

Non-residents are liable for several taxes, including Property Transfer Tax (for resale properties), VAT (for new properties), and non-resident income tax. 

Additional costs may include Stamp Duty, Land Registry, and Wealth Tax. 

Given potential legislative changes, consulting a local tax advisor or legal counsel is strongly recommended to understand current tax liabilities and additional costs associated with buying property in Spain. 

What are the property taxes for resale properties in Spain?

The Property Transfer Tax is the main tax you must pay when buying a resale property. 

Also known as Impuesto de Transmisiones Patrimoniales (ITP), the tax varies by Autonomous Community, with a minimum of 6% and a maximum of 11% on the property's price.

The amount payable depends on the property price and is calculated on a sliding scale. 

Transfer tax also applies to other property types, such as garage spaces, with rates varying based on the price. For garage spaces up to 30,000 EUR, the rate is 8%, while for those priced between 30,000 and 50,000 EUR, it is 9%.

Let's assume you are buying a second-hand property worth 350,000 EUR in Madrid. 

In addition to the sale price, you will have to pay another 25,875 EUR for the following taxes: 

Simulation rates on October 2, 2023. Prices may vary depending on the value of the property.

What are the property taxes for new properties in Spain?

When purchasing a new-build property in Spain, you are responsible for two taxes:

1. Value Added Tax or VAT (IVA in Spanish), which is calculated at a rate of 10% of the purchase price 
2. Stamp Duty (AJD in Spanish), which is usually between 0.5% and 2% of the purchase price

The Stamp Duty tax varies in different regions, so checking with the regional government is a good idea. In Madrid, for example, stamp duty is 1.5%.

​​If you buy a new property worth 650,000 euros in Madrid, you will pay 72,625 EUR in taxes:

Simulation rates on October 2, 2023. Prices may vary depending on the value of the property

What are the notary costs when purchasing a Spanish property?

Notary costs are associated primarily with preparing title deeds and range around 0.5% to 1% of the property's purchase price.

These costs are essential as the notary is also required to witness the signing of the deeds by all parties involved in the transaction, ensuring the legality and validity of the property transfer.

Transactions that include mortgages usually have higher notary costs due to the additional paperwork and complexities involved. These fees are for the legal validation of the property transaction and to ensure that all necessary documentation is accurately completed and recorded.

Is there a way to simplify accessing a Spanish mortgage from abroad?

If you’re looking to simplify your cross-border house-buying journey, Homevest is a suitable solution to access a Spanish mortgage directly from abroad. 

By submitting your mortgage documents on the Homevest platform just once, you can access leading banks in Spain, including CaixaBank, Sabadell, Santander, Unicaja, or Cajasur.  

This allows you to receive and compare mortgage offers, enabling you to select the most suitable option for your financial circumstances.

Legal representation is essential when purchasing property in Spain. Homevest Legal ensures, through its property lawyers, that your property purchase proceeds as planned. For legal due diligence and remote notarization, request a quote for assistance.

What other taxes should you consider when buying a property in Spain as a non-resident? 

In addition to the previously mentioned, be aware that you may also incur mortgage, gestoría, bank, land registry, and real estate agent fees.

Let's explore these additional taxes below:

Mortgage fees

Mortgage fees are associated with securing a mortgage, including application, valuation, and arrangement fees. They play an essential role in the overall financial planning for buying a property as they can notably elevate the total purchase cost. 

Bear in mind that banks typically require a property appraisal, ranging between 300 and 600 EUR. 

Besides the taxes involved, it’s essential to have an overall understanding of obtaining a mortgage in Spain, including requirements, interest rates, and information for non-resident buyers. 

Gestoría and bank fees

These cover the costs of obtaining the necessary documents and completing administrative tasks to ensure a smooth property transaction.

Banking costs involve various fees and charges associated with transferring and receiving funds through banks, which can add to the overall cost of buying a property.

Land registry fees

These fees, typically ranging from 0.5% to 1%, are essential because they cover the official property ownership recording.  They play a crucial role in maintaining up-to-date ownership records and offer legal protection to property owners.

Real estate agent fees

The seller typically pays real estate agent fees, which can vary from 2% to 10% or more, depending on the property type and location. 

While these fees are usually the seller's responsibility, buyers must be aware of them, as they can indirectly affect the property's final selling price.

Frequently asked questions

Do I pay taxes if I own a property in Spain?

If you own property in Spain, you are subject to an annual wealth tax based on the net value of your assets in Spain, after permitted deductions like mortgages. 

However, the specific tax amount and regulations depend on the autonomous region where your property is located. In many regions, there's no wealth tax if the net value of your property is below 700,000 EUR.

Do I need to pay wealth tax in Spain even if I am a non-resident?

Even as a non-resident, you are required to pay wealth tax (Impuesto de Patrimonio) on your assets if the total gross value of your goods in Spain exceeds 2 million euros. 

Do I pay taxes if I rent out my property in Spain?

Yes, you must pay an income tax, ranging from 19% to 24%, depending on whether you are an EU citizen or not.

Sources used for this article:

1. Sales cost calculator
2. Taxes and fees when buying a property in Spain
3. Wealth tax in Spain

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.