Taxes in Spain. How much are the property taxes and what are the income taxes?

Buying a property in Spain entails tax liability, regardless of whether you plan to live in it or rent it out. Where do you have to pay taxes and how much are they in Spain? Find out in this guide.

02.04.2025

For years, Spain has been attracting investors from all over the world, who have come to appreciate the local market for its stability, high demand and attractive rates of return. The available data shows that in 2023, more than 20% of all transactions were made by foreigners. Are you planning to buy a property in Spain? Taxes are one of the most important topics that are worth familiarising yourself with at the stage of searching for a house or apartment. You will find all the relevant information in this article, and if in doubt, consult a real estate agent or tax advisor.

Contents:

The Spanish tax system is different from the one you are familiar with. On the Iberian Peninsula, there are not only impuestos, or taxes, but also tasas (fees) and contribuciones especiales (special contributions). For investors, the first type of tax is the most important, and it is further divided into two types: state and regional.

Which taxes in Spain should investors be aware of? If you are planning to buy a property on the primary market, one of the fees is VAT (an indirect tax). In addition to this, there are direct taxes, i.e. taxes that reduce your income, e.g. from renting out a flat. These are:
 

• income tax for non-residents (Impuesto sobre la Renta de no Residentes),
   
• property tax (IBI, Impuesto sobre Bienes Inmuebles).
   

What's more, if your assets in Spain exceed 700,000 euros, you will be required to pay another tax, this time wealth tax: Impuesto sobre el Patrimonio. This is a fee charged regardless of whether the owner has resident status.

What are the taxes for non-residents in Spain? Natural persons who own a property are obliged to pay IRNR, which stands for Impuesto sobre la renta de no residentes. This is an income tax for non-residents, which you have to pay not only if you offer a flat or a house for rent. 

IRNR is calculated on the basis of 1.1% of the cadastral value, which is usually already lower than the market value. In the case of EU residents, the tax itself is 19% of this sum and applies only to people who do not rent out their property. Otherwise, the basis for calculation is the income received from tenants. In this case, the tax in Spain for EU citizens is also 19%.

However, the owner can deduct the aforementioned income from the costs incurred directly related to the maintenance of the rented property. For example, IBI tax, utility bills or even insurance costs and repairs carried out are deductible.

A tax residency is, in simple terms, the country in which a person is subject to taxation and pays taxes to the local tax office. According to the law, Polish citizens who are natural persons and live in Poland are obliged to pay taxes on all their income. It does not matter whether the income comes from an employment contract in Poland or from renting out a property in Spain or another country.

The following criteria must be met to determine tax residency:
 

• Place of residence – the natural person stays in the territory of a given country for more than 183 days in a calendar year (not necessarily continuously).
   
• centre of personal or economic interests – this can be a family or a company run in the country.
   

Remember that if you spend more than 183 days a year on the Iberian Peninsula, you will automatically be considered a tax resident. In this case, you pay all taxes in Spain, including those on income earned in Poland.

The Spanish property tax is called Impuesto sobre Bienes Inmuebles. However, it is most commonly referred to as IBI. As in Poland, all property owners on the Iberian Peninsula pay it once a year. It is a municipal tax that varies depending on the location of the house or apartment. On the Costa del Sol, the rate varies between 0.5 and 1.2% of the cadastral value. On the Costa Blanca, on the other hand, the IBI is usually between 0.4 and 1.1%.

It is important to remember that property tax in Spain applies to both residents and non-residents.

When talking about taxes in Spain, one should also mention the tax representative, or representante fiscal. Who is he? He is a person appointed by the owner of a property in Spain who does not have resident status. Importantly, it is not voluntary – it is required by law, which also stipulates that only a resident can become a representative. Failure to appoint a representante fiscal is subject to a financial penalty of up to 6,000 euros (depending on the current exchange rate).

The most important tasks of the representante fiscal include:
 

• Assistance in preparing and submitting tax returns,
   
• Acting as an intermediary in communication between the property owner and the Spanish tax office.
   

Since the representante fiscal settles taxes in Spain on behalf of his client, he is able to help in the event of a tax audit or the appearance of possible irregularities in the calculations. 

The last question remained to be answered: renting a flat in Spain and taxes in Poland. Do you have to bear double costs when settling in both countries? Fortunately, no. Seeing that Poles are increasingly choosing the Iberian Peninsula - not only to buy a house, but also to live - the authorities have decided to solve the problem of double taxation.

From 1 January 2023, the agreement on the avoidance of double taxation with respect to taxes on income and capital (Dz.U.1982.17.127) is in force. According to the law, the taxpayer is obliged to declare foreign financial benefits on the PIT-28 form. However, if the taxes paid in Spain are higher than those paid in the country of residence, the property owner does not have to pay them in Poland.

Now you know about taxes in Spain. 2025 is a good time to invest in real estate on the Iberian Peninsula. You can find your dream house or apartment with the help of Elite World Estates - a Polish agency that will guide you step by step through the purchase process and complete all formalities, including tax issues. See properties for sale in Spain!

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Let us narrow down the search among the properties available through us, by contacting us and finding the best options for you. We are here to help you! Please enter your contact details below and we will contact you as soon as possible.

Let us narrow down the search among the properties available through us, by contacting us and finding the best options for you. We are here to help you!
Please enter your contact details below and we will contact you as soon as possible.