Property Taxes for foreigners in Spain

If you are thinking about moving to Spain and purchasing a property for the holidays in Marbella or La Costa del Sol, you will be interested in knowing about the types of taxes that affect this type of purchase in general for Spanish people and for foreigners. Many opt for not paying these taxes as they aren’t aware of them or because they think they are too high. However, the Spanish government has tightened the law taxes and you must know them before anything else.

Even if you are a foreigner, you will have to pay the same property taxes as a Spanish resident when buying or selling a house. In most cases, the same taxes are applied to both residents and non-residents but there are other instances in which non-residents will have a specific tax to pay for that property. The percentage of the taxes will also depend on the community the property belongs to
There are two main types of taxes which affect properties in Spain: IVA which is the VAT in Spanish and the Property Tax Transfer, which would be the ITP. The trading of a property is affected by the ITP taxes and it changes according to the community, for instance in Barcelona is 10% if the value of the property is not above one million. If it’s a purchase of a brand new property from a property developer, the IVA would be 10% in the case of housing and 21% for an establishment.

After the purchase of the property, there are other taxes that you should take into account too. The IBI (Property Tax), which is closely related to the cadastral value of the property, is paid by every citizen and it depends on the city, you will have to pay it annually. There is another tax, which is only paid by natural people and that is the non-residents tax, calculated on the 2% of the value of the property, sometimes could be 1.1% and then it’s applied the general tax for non-residents that it would be 19% for European citizens and 24% for non-European and that payment should be made annually.

If you have been living in Spain for more than 183 days, you will have to confirm to the Tax Agency that you are a tax resident so you can avoid any fine and legal problem. In the case you own a house in Spain for the holidays and it’s not your usual residence, according to the law, you would still have to make an annual tax declaration.
If you need any legal help related to a property here in Spain and especially in the Marbella area, contact with our services and you will be assisted as soon as possible by our accountants and lawyers.