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En Costa Prime Realty, I speak with many buyers every day, and every day I answer the same question: ‘What are the property taxes?‘ Well, it depends on the property. There is VAT for new properties, ITP for second-hand properties, AJD for new properties, capital gains tax on property resale, and even wealth tax or income tax on short- or long-term rentals. It also depends on whether you are an EU, non-EU or Spanish tax resident. It’s simple, with only three case scenarios. Let’s review those together.
My name is Izidor and many clients have asked me the same questions about property taxes in Spain recently, especially in the Costa del Sol area.
Buyers from countries such as the UK, Germany, Bulgaria and the US often worry about taxes when buying or selling property in Spain.
This guide is designed to be simple and easy to understand, especially for foreign buyers and expats.
Why Property Taxes in Spain Confuse Many Buyers
Perhaps it is because of the unfamiliar abbreviations and lack of information about what they mean. When buying or owning property in Spain, several taxes may be applicable.
Keep in mind that you will see different VAT, ITP, and AJD rates in all autonomous communities when buying a property. Here, we will only speak in the context of Andalusia, specifically the Costa del Sol:
- IVA for new properties
- ITP for second-hand properties
- AJD (Stamp Duty) for new properties
- Capital Gains Tax when selling a property
- Income tax if the property is rented
- In some cases wealth tax
It also depends on whether you are:
- Spanish tax resident
- EU resident
- Non-EU resident
So instead of complicated explanations, let’s keep it simple. There are three main scenarios most buyers on the Costa del Sol should understand.
Property Tax in Spain When Buying (Costa del Sol)
The tax depends mainly on whether the property is new or resale.
Resale property (most common on the Costa del Sol)
Taxes:
- ITP (Impuesto sobre Transmisiones Patrimoniales) – Transfer Tax: about 7% in Andalusia
- Paid once when buying
Example:
- German buyer purchases property for €500,000
- ITP ≈ €35,000
New property from a developer
Taxes:
- VAT (IVA – or Impuesto sobre el Valor Añadido): 10%
- AJD (Actos Jurídicos Documentados) Stamp Duty: ~1.2%
Example:
- UK buyer buys new apartment €400,000
- VAT = €40,000
- AJD ≈ €4,800
Additional purchase costs:
- Notary and registry 1–2%
Annual Property Taxes in Spain for EU and Non-EU Owners
Many buyers search for Spain property tax for foreigners o Spain property tax non-EU.
The good news: EU and non-EU owners usually pay the same property taxes.
The main annual tax is:
IBI (Impuesto sobre Bienes Inmuebles) – Local Property Tax
- Paid to the municipality
- Based on cadastral value
Typical Costa del Sol range:
- €400 – €1,200 per year
Example:
Apartment in Estepona valued €500k
IBI ≈ €700/year
Si usted do not live in Spain, there is also non-resident income tax.
Rates:
- EU residents (Germany, Bulgaria, Netherlands, etc.): 19%
- Non-EU residents (UK, US): 24%
Example:
Property cadastral value €120,000
Annual tax roughly €250 – €500
Property Taxes When Selling Property in Spain
When selling property on the Costa del Sol, sellers usually pay two main taxes.
Capital Gains Tax (CGT)
Paid on the profit from the sale.
Rates:
- Spanish residents: 19–28%
- Non-residents (EU and Non-EU): 19%
Example:
Bulgarian EU owner
- Bought for €300,000
- Sold for €400,000
- Profit €100,000
- Tax ≈ €19,000
3% Withholding for Non-Residents
If the seller is not a Spanish resident:
- Buyer must withhold 3% of the sale price
- Paid to the Spanish tax authority, with refunds possible if actual liability is lower, via Form 210.
Example:
Sale price €500,000
- €15,000 withheld
Final Advice from Costa Prime Realty
Buying property in Spain can look simple at first, but in reality it is a legal and financial process with many steps. Taxes, contracts, reservations, bank transfers, notary procedures and registration all need to be handled correctly.
En Costa Prime Realty, we work with a network of experienced real estate lawyers and tax advisors who speak your mother tongue whenever possible. Whether you are from the UK, Germany, Bulgaria, the US or another country, we make sure you fully understand every step and every document.
If you need a mortgage, we highly recommend connecting you with the best mortgage brokers. This will allow you to compare offers from the largest Spanish banks at no extra cost.
Our partners help you with:
- Legal checks of the property
- Tax planning and explanations
- Opening a Spanish Bank Account
- Purchase contracts and reservations
- NIE number and administrative procedures
- Representation through power of attorney if needed
Our goal is to make the process clear, safe, and easy to understand, even if this is your first time buying property on the Costa del Sol.
We guide you from the first property viewing all the way to receiving the keys. If necessary, we also represent you and attend the notary on your behalf, ensuring everything is completed correctly.
I hope this guide helped answer some of your questions about property taxes on the Costa del Sol.
And I hope to welcome you here soon.
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