TAXES GUIDES
OWNING PROPERTY TAXES GUIDE
Understanding owning property taxes in Altea
Understanding owning property taxes in Altea
PROPERTY OWNERSHIP TAXES
What taxes do homeowners in Spain have to pay?
Both Spanish nationals and foreign citizens, whether residents or non-residents in Spain, who own a property in Spanish territory are required to pay taxes regardless of whether the property is rented out or used for private purposes.
To determine which taxes a homeowner in Spain must pay and how much is due, the first key factor to consider is whether the owner is a tax resident or a non-resident in Spain.
This distinction between resident and non-resident is purely fiscal and has nothing to do with holding or not holding a residence permit in Spain. Later on, we will explain when Spanish law considers a person to be a tax resident in Spain.
These are the taxes and relevant issues that a property owner should take into account:
INCOME TAX
The IRPF return includes all income earned by a person who is a tax resident in Spain, such as employment income, investment income, business activities, capital gains, etc., whether generated in Spain or abroad, with the exception of certain public-sector pensions.
This does not mean that such persons must pay tax twice on income earned abroad. Instead, they may apply for an exemption in Spain or request a refund in the country where the income was generated, in accordance with applicable double taxation treaties.
Spanish legislation considers a person to be tax resident in Spain if any of the following conditions are met:
Persons falling under any of these scenarios, even if they maintain residence in another country, are automatically required to file a Personal Income Tax (IRPF) return in Spain, regardless of whether they have applied for or obtained a residence permit.
Non-resident individuals who own a property located in Spain are subject to Non-Resident Income Tax (IRNR).
Non-resident homeowners must pay this tax in the following cases:
If a non-resident rents out the property, they must pay tax on the rental income received.
EU/EEA residents may deduct expenses in proportion to the period during which the property is rented.
Following the judgment of the Spanish National High Court dated 28 July 2025, both EU/EEA residents and non-EU residents may now deduct necessary expenses directly related to the property (such as IBI, community fees, insurance, mortgage interest, and repairs) when filing Form 210, thereby equalising their tax treatment with that of residents.
If a double taxation treaty exists between Spain and the country of tax residence, the property owner may deduct the tax paid in Spain from their income tax return in their country of residence.
Rental income must be declared quarterly, during the first twenty calendar days of April, July, October and January, in respect of income received in the previous calendar quarter.
Yes. If the property is vacant or used for private purposes, non-resident owners must pay tax on the imputed income derived from personal use.
The taxable base is calculated as:
Example:
Dieter Schmidt, a German resident, owns an apartment in Altea used for holidays, with a cadastral value of €250,000.
Tax base: €250,000 × 1.1% = €2,750
Tax due: 19% × €2,750 = €522.50
The filing and payment period runs from 1 January to 31 December of the year following the year of accrual.
Within three months from the date of sale, the non-resident seller must declare the capital gain and pay the corresponding tax.
The buyer, whether resident or non-resident, is legally required to withhold 3% of the purchase price and pay it to the Spanish Tax Authorities.
This amount constitutes a payment on account of the seller’s tax liability. If the 3% withheld exceeds the final tax due, the seller may request a refund of the excess.
What if the buyer does not pay the 3% withholding?
In such cases, the property remains liable for the tax debt, and this will be recorded in the Land Registry. The entry will only be cancelled upon expiry or upon proof of payment, non-liability or statute of limitations.
IMPORTANT
The Spanish Tax Authorities do not send payment notices, reminders or assessments to non-resident taxpayers regarding Non-Resident Income Tax.
Non-residents (or their representatives) are fully responsible for calculating the tax, filing the self-assessment and making the payment.
Failure to comply may result in significant financial penalties.
Non-resident property owners must also declare any other income earned in Spain, not only income related to property ownership.
Wealth Tax applies to the net assets of individuals.
Yes. Non-residents who own property or other assets in Spain are subject to Wealth Tax in the same way as residents.
The taxable base is the net value of the property (value minus outstanding debts such as mortgages).
A €700,000 tax-free allowance applies. If the total value of assets in Spain does not exceed this amount, no tax is payable.
Therefore, a couple owning a property valued below €1,400,000 (50% each) will not be required to file or pay Wealth Tax.
Tax rates range from 0.2% to 2.5%, applied progressively.
Many modern double taxation treaties allow Spain to tax shares in companies whose assets consist of more than 50% Spanish real estate.
However, some Spanish courts have ruled that Wealth Tax applies only to assets located or exercisable in Spain and does not extend to foreign companies, despite treaty provisions.
OTHER PROPERTY-RELATED TAXES
A local tax payable annually by all property owners, residents and non-residents alike. It is based on the cadastral value and collected by the local council, usually between September and November.
Non-resident companies domiciled in tax havens and owning Spanish property must pay 3% of the cadastral value annually, payable before 31 January.
Companies exempt due to tax treaties must provide an email address to receive official notifications from the Tax Agency.
This tax applies to heirs and beneficiaries of inheritances or gifts. It is regulated by the Autonomous Communities, resulting in significant regional differences.
Unlike other countries, Spain does not provide an automatic spousal exemption.
Spanish residents must declare foreign assets exceeding €50,000 in any of the following categories:
The declaration is filed electronically. Failure to file or incorrect filing may result in severe penalties.
You now know which taxes apply to homeowners in Spain, whether Spanish or foreign, resident or non-resident, and the key differences between tax residency statuses.
Given the complex and constantly evolving nature of tax law, we strongly recommend relying on true professionals with proven training and experience in real estate taxation, rather than entrusting your affairs to a simple “house seller”.
At ALTEAINVEST, we offer solid, demonstrable expertise and over 45 years of experience, ensuring effective tax planning to legally reduce your tax burden and avoid costly penalties.
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