A property investor in Spain is subject to four types of tax: on purchase (transfer tax or VAT), whilst owning the property (imputed income and council IBI), on rental income (the non-resident tax IRNR) and on sale (capital gains tax and plusvalía). Anyone who estimates these charges correctly in advance will avoid unpleasant surprises and calculate a realistic net return. For Belgians and Dutch nationals investing on the Costa Blanca, this forms the basis of any sound business case.
In this guide from Invest in Spain We will walk you through the entire tax lifecycle of your investment — from purchase to sale — using the latest figures for 2026.
1. Taxes on purchase
If you are buying an existing property, you will pay transfer tax (ITP). In the Valencian Community, which includes the Costa Blanca, this rate will fall from 10% to 9% from 1 June 2026 for properties valued at up to €1,000,000. If you are buying a new-build property, you will pay 10% instead. btw (IVA) plus a stamp duty (AJD). You can find the details in our guide to the Transfer tax in Spain 2026. On top of that, you’ll need to factor in notary, registration and solicitor’s fees; together, these make up the buyer's costs from 10% to 15%.
2. Taxes during ownership
As long as you are the owner, you will pay the annual council property tax IBI — roughly €200 per €100,000 of the property’s value, so around €600 for a property worth €300,000.
Whether you live in the property yourself or it stands empty, the Spanish tax authorities also levy a imputed income (notional income): you pay 19% (EU/EEA citizens) on 1.1% of the cadastral value if it has been revised in the last ten years, or on 2% if it has not. This is done via the tax return form Model 210, which is also compulsory even if you do not let out any property.
3. Tax on rental income (IRNR)
If you let out your property, you will have to pay non-resident tax IRNR Regarding the rental income:
- EU/EEA citizens (Belgians, Dutch, Germans, French): 19% on the net-rent — you may deduct costs such as maintenance, property tax, insurance and depreciation.
- Non-EU citizens (e.g. British nationals after Brexit): 24% on the gross-rent, without deduction of costs.
Furthermore, letting is only permitted with the correct rental licence. You can find out how to calculate your net return realistically in our guide calculate return on holiday house Spain.
4. Capital gains tax
Spain has a wealth tax (Wealth Tax) for non-residents on their property situated in Spain. The national exemption amounts to €700,000 net per person, although this threshold varies by region. For most second homes, you will remain below this limit, but it becomes relevant in the case of high-value property or multiple properties.
5. Taxes on the sale
If you sell at a profit, you pay capital gains tax on the capital gains realised (usually 19% for non-residents). Furthermore, in the case of a non-resident, the buyer retains 3% of the selling price as withholding tax for the tax authorities. In addition, there is the local plusvalía municipal regarding the increase in land value. Make sure to factor this into your exit strategy.
Smart structuring for maximum returns
Taxes play a part in determining whether an investment is profitable. Choosing the right location, obtaining the correct letting licence, accurately deducting costs and planning a well-thought-out exit strategy make the difference between a good return and a meagre one. Take a closer look at our more detailed analyses on real estate investments in Spain and about how overseas property is taxed in your home country.
How we can help you
The team at Invest in Spain, led by property expert and CEO Kenzo Fayot, will work with you to work through the full tax picture before you invest, and will put you in touch with tax advisers and a gestor for your annual tax returns. This way, you can invest with a clear understanding of your net return — whether you’re letting out a flat in Torrevieja or holding onto a villa on the Northern Costa Blanca for capital appreciation.
Frequently asked questions about tax for property investors
What tax do I pay on rental income in Spain?
As an EU/EEA citizen, you pay 19% IRNR on the net rent (costs are deductible). Non-EU citizens pay 24% on the gross rent, with no deductions. You must submit your tax return using Form 210.
Do I have to pay tax if I don’t let out my property?
Yes. Even in the case of owner-occupation or when the property is vacant, Spain levies an imputed income of 19% on 1.1% or 2% of the cadastral value, plus the annual IBI.
How much tax do I pay when I sell?
Non-residents generally pay 19% capital gains tax on the profit; the buyer withholds 3% of the price as withholding tax. In addition, the local ‘plusvalía’ tax applies to the increase in the value of the land.
Is there a wealth tax?
Yes, for assets located in Spain that exceed an exemption of €700,000 net per person (which varies by region). Most second homes fall below that threshold.
Would you like to structure your investment in accordance with tax regulations? Please get in touch with our team for a bespoke quotation.
