Taxes and mortgages are the two topics that trip up most non-residents. The good news: both follow clear rules. Below are all the taxes a non-resident pays (on purchase, annually and on sale), the rental rates of 19% (EU) / 24% (non-EU), and the real mortgage terms: banks lend 60–70% of value, so you need 30–40% of your own cash. With tables and worked numbers.
Taxes on purchase
The first big payment is the acquisition tax. It depends on the property type.
| Tax | New-build (off-plan) | Resale |
|---|---|---|
| VAT (IVA) | 10% of price | — |
| Transfer tax (ITP) | — | 6–10% (by region) |
| Stamp duty (AJD) | 1–1.5% | usually not applied |
Add notary, registry and lawyer fees (see the full budget in the non-resident guide). Total on top of the price: 10–14%.
ITP on resale — the rate depends on your region
Transfer tax (Impuesto de Transmisiones Patrimoniales) is set by each autonomous community, so the same €300,000 flat can carry very different tax depending on where it sits:
| Region | Typical ITP rate |
|---|---|
| Madrid | 6% |
| Canary Islands | 6.5% |
| Andalusia (Costa del Sol) | 7% |
| Murcia (Costa Cálida) | 8% |
| Valencia (Costa Blanca) | 10% |
| Catalonia | 10–11% (tiered) |
| Balearics | 8–11% (tiered) |
Several regions apply reduced rates for a main home, for buyers under 35, or for large families — worth asking your gestor about. On a €300,000 resale in Valencia, ITP alone is €30,000; the same home in Madrid is €18,000.
New-build: IVA plus AJD
For an off-plan or brand-new home you pay 10% IVA (VAT) — or 4% for officially protected housing (VPO), and 21% IVA on a plot of land or commercial premises — plus AJD stamp duty of roughly 1–1.5%. On a €300,000 new-build that is €30,000 IVA + ~€3,600 AJD ≈ €33,600 in acquisition tax before notary and registry.
Annual taxes for a non-resident owner
Even if you never let the home, you have annual obligations.
| Tax | Who pays | Rate / base |
|---|---|---|
| IBI (municipal) | all owners | 0.4–1.1% of the cadastral value per year |
| IRNR — imputed income | non-resident, if not let | 19% (EU/EEA) / 24% (non-EU) of ~1.1–2% of cadastral value |
| IRNR — rental income | non-resident, if let | 19% (EU/EEA) / 24% (non-EU) of income |
| Rubbish / local fees | all | fixed municipal charges |
Key fact: EU/EEA residents may deduct expenses (mortgage interest, IBI, repairs, depreciation) before taxing rental income. Non-EU/EEA residents generally cannot deduct and pay 24% on gross income.
IBI — the yearly property tax in Spain
Every owner, resident or not, pays IBI (Impuesto sobre Bienes Inmuebles) to the town hall. It is 0.4–1.1% of the cadastral value per year — usually far below market value — so a typical coastal apartment pays a few hundred euros to around €1,000 annually. Set it up as a direct debit; unpaid IBI becomes a charge that partly follows the property to the next owner.
Imputed income tax (if you don't let)
Here is the point most non-residents miss: even if you never rent the home out and only use it yourself, Spain taxes a notional rent. The base is 1.1–2% of the cadastral value, taxed at 19% (EU/EEA) or 24% (non-EU). On a home with a €100,000 cadastral value that is roughly €1,100–2,000 of imputed income, so €210–480 of tax a year — filed on Modelo 210.
Wealth tax and the "solidarity" tax
High-value estates can attract wealth tax (Impuesto sobre el Patrimonio), levied by region with a general exempt threshold around €700,000 per person of net Spanish assets (higher in some regions; Madrid effectively rebates it). A national solidarity tax on large fortunes mirrors it above roughly €3 million. Most buyers never reach these thresholds, but factor them in for trophy properties.
Rental income tax: 19% vs 24%
This is the single most searched question, and here is the essence:
- 19% — for EU/EEA tax residents, with the right to deduct expenses.
- 24% — for residents outside the EU/EEA (US, post-Brexit UK, and others), on gross income with no deductions.
You file using Modelo 210 — quarterly when there is rental income, or annually for imputed income. If you plan to let short-term, be sure to read the 2025 rental rules: licences and registration are now mandatory.
How to avoid tax on rental income legally
You cannot escape tax, but you can minimise it lawfully:
- Claim every deductible if you are an EU/EEA resident — mortgage interest, IBI, community fees, insurance, agency fees, repairs, and depreciation (typically 3% of the building value a year).
- Keep all invoices with your NIE on them; undocumented costs cannot be deducted.
- File Modelo 210 on time (quarterly for rental income) to avoid surcharges.
- Check the double-taxation treaty between Spain and your home country so the same income is not taxed twice — you usually credit Spanish tax at home.
Non-EU owners cannot deduct expenses, which is why the effective burden of the 24% gross rate is meaningfully higher than the EU 19% net rate.
Taxes on sale
When you sell, two taxes apply:
- Capital gains tax (IRNR): a non-resident pays on the profit (sale price minus purchase price and allowable costs). At completion the buyer withholds 3% of the price as a tax advance (retención) and pays it to the tax office on your behalf; you settle the balance or reclaim any excess on Modelo 210.
- Plusvalía municipal: a municipal tax on the increase in land value during your ownership, paid by the seller. Since a 2021 reform you can choose the calculation method (real gain vs cadastral formula), and no tax is due if you sell at a loss.
Key fact: keep the invoices for your purchase costs, renovation and agency fees — every documented euro reduces the taxable gain when you eventually sell.
The non-resident tax calendar
| When | Obligation | Form |
|---|---|---|
| Within 30 days of purchase | Pay ITP or IVA + AJD | Modelo 600 / 620 |
| Annually (autumn) | IBI municipal tax | town-hall bill |
| Annually — by 31 Dec | Imputed income (if not let) | Modelo 210 |
| Quarterly | Rental income (if let) | Modelo 210 |
| On sale | Capital gains + plusvalía | Modelo 210 / local |
A local gestor or tax adviser usually handles Modelo 210 filings for a modest annual fee, and it is money well spent given the penalties for late or missed returns.
Mortgages for non-residents: how much banks lend
Spanish banks are happy to lend to foreigners, but more conservatively than to residents. A guide to the deposit:
| Buyer profile | LTV (loan share) | Own funds needed |
|---|---|---|
| Spanish tax resident | up to 80% | ~20% + costs |
| Non-resident (EU and non-EU) | 60–70% | 30–40% + costs |
| Pure investment purchase | often closer to 60% | 40%+ |
Practical takeaway: with a non-resident mortgage, keep 40–50% of the price available — that is the deposit plus 10–14% in taxes and fees.
Bank requirements
- NIE and proof of income (payslips, tax returns for 1–2 years).
- Debt-to-income ratio: total loan payments usually below ~30–35% of net income.
- A valuation (tasación) by an accredited firm.
- Rates for non-residents are slightly higher than for residents; both fixed and variable (Euríbor-linked) exist.
The biggest players in the non-resident mortgage market are BBVA, Santander and Sabadell. A local mortgage broker and an NIE obtained in advance speed up approval considerably.
Documents the bank will ask for
- Valid passport and NIE.
- Proof of income: payslips (employees) or 1–2 years of tax returns and accounts (self-employed).
- Recent bank statements (3–6 months) and a summary of existing debts.
- A credit report from your home country, where available.
- The draft sale contract or arras, and the property details for valuation.
Fixed vs variable, and current rates
Spanish non-resident mortgages come as fixed (rate locked for the whole term) or variable (Euríbor + a margin). Fixed rates give budgeting certainty and are popular with overseas buyers; variable rates can start lower but move with the Euríbor. Non-resident rates sit a little above resident rates, and terms typically run 20–25 years, often with an age cap (loan repaid by around 70–75). Compare the total cost, not just the headline rate — arrangement fees, the mandatory valuation and any tie-in insurance all count.
Worked example
A €300,000 new-build, buyer is an EU resident, 70% mortgage:
- Bank loan: €210,000
- Deposit (30%): €90,000
- Taxes and fees (~12%): €36,000
- Total own funds at entry: ~€126,000
How to reduce your tax burden legally
- EU/EEA residents — claim your expense deductions (interest, IBI, repairs, insurance, depreciation).
- Keep records of the source of funds and of all costs — this lowers future capital-gains tax.
- Long-term residential letting may carry additional reliefs — check with a tax adviser (gestor).
- Consider the ownership structure (individual vs company) in light of your country and its double-taxation treaty.
What happens next
Work out your full entry cost (deposit + taxes) with our yield calculator and review yield by area. If you need help with the NIE, a bank account or choosing a lender — send a request and a specialist will guide the purchase and the mortgage.