Annual Taxes Every Owner Pays
Regardless of whether you live in Spain or not, owning property means paying two annual local taxes:
IBI (Impuesto sobre Bienes Inmuebles) — Spain's equivalent of council tax / property tax. Calculated as the catastral value (valor catastral) multiplied by a rate set by each municipality. Rates range from 0.4% to 1.1%. In practice, this means €300–€600/year for a modest apartment, €800–€2,000+ for a villa. Marbella and Málaga have higher catastral values than Costa Blanca municipalities.
Basura (waste collection tax) — A separate annual tax for municipal waste services. Typically €50–€200/year depending on the municipality and property type. Paid directly to the town hall, usually via direct debit.
Non-Resident Imputed Income Tax (The Hidden One)
This catches many owners by surprise. If you own property in Spain but are not a Spanish tax resident, you must file Modelo 210 annually and pay tax on a fictional "imputed income" — even if the property sits empty all year.
The calculation: catastral value × 1.1% (or 2% if not revised recently) × 19% tax rate for EU/EEA residents, or 24% for non-EU residents.
For a property with a catastral value of €150,000: €150,000 × 1.1% = €1,650 imputed income × 19% = €313.50/year.
This is filed between January 1 and December 31 of the following year. Many owners use a gestoría (tax agency) to handle this — expect to pay €50–€100 for the filing service.
Tax on Rental Income
If you rent out your property, the tax treatment depends heavily on your residency status:
EU/EEA residents: Taxed at a flat 19% on net rental income. Crucially, you can deduct expenses — mortgage interest, IBI, community fees, insurance, repairs, management fees, and depreciation (3% of construction value per year). This often reduces the effective tax to near zero for moderately leveraged properties.
Non-EU residents: Taxed at a flat 24% on gross rental income. No deductions allowed. This is a significant disadvantage. If you earn €12,000/year in rent, you owe €2,880 — regardless of your expenses.
Spanish tax residents: Rental income is added to your general taxable income and taxed at progressive rates (19–47%). However, you can deduct all expenses and apply the 60% reduction for long-term residential rentals (50% from 2025 under the new housing law).
Capital Gains Tax When You Sell
When you sell a Spanish property at a profit, capital gains tax (Impuesto sobre la Ganancia Patrimonial) applies:
Rates (2025): 19% on the first €6,000 of gain, 21% on €6,001–€50,000, 23% on €50,001–€200,000, 27% on €200,001–€300,000, and 28% above €300,000.
The gain is calculated as: sale price minus purchase price minus allowable costs (buying taxes, selling agent fees, capital improvements — but not regular maintenance).
3% retention for non-residents: The buyer is legally required to withhold 3% of the sale price and pay it directly to the tax authorities as an advance against your capital gains tax. You claim any overpayment back by filing Modelo 210 within 3 months of the sale.
Over-65 exemption: If you're a Spanish tax resident, over 65, and selling your primary home, the capital gain is fully exempt — one of the most generous property tax breaks in Europe.
Community Fees (Not a Tax, But a Cost)
Technically not a tax, but community fees (gastos de comunidad) are a guaranteed ongoing cost for any property within a community of owners — which includes most apartments, townhouses, and many villa developments.
Fees cover building insurance, communal area maintenance, pool upkeep, gardening, cleaning, lift maintenance, and a reserve fund. Typical ranges:
Apartment: €80–€250/month. Higher for complexes with pools, gyms, and concierge services.
Townhouse: €50–€150/month.
Villa in gated community: €150–€500/month. Luxury urbanisations with 24h security can exceed €1,000/month.
Always request the last 12 months of community minutes and accounts before buying. Special assessments (derramas) for major works like facade repairs or lift replacement can run to thousands of euros.
What Does It Actually Cost to Own? Total Holding Cost Example
For a €350,000 apartment in Fuengirola owned by a non-resident EU citizen, annual holding costs look like this:
IBI: ~€850 | Basura: ~€120 | Imputed income tax: ~€340 | Community fees: ~€2,400 | Home insurance: ~€350 | Total: ~€4,060/year or approximately 1.16% of property value.
For a €200,000 apartment in Torrevieja owned by a non-resident EU citizen: IBI: ~€400 | Basura: ~€80 | Imputed income tax: ~€190 | Community fees: ~€1,440 | Home insurance: ~€250 | Total: ~€2,360/year or approximately 1.18% of property value.
These numbers are consistent regardless of nationality within the EU. Non-EU owners face higher imputed income tax (24% vs 19%) and higher rental income tax, adding roughly 20–30% to the tax components.
