Legal & Tax Guide for Property Buyers on the Costa del Sol
1 February 2026
Spain has a well-defined legal framework for property purchase, but the fiscal implications for non-resident international buyers require careful planning. This guide outlines the key taxes, costs and obligations.
Key Takeaways
- When purchasing a resale property in Andalucía, non-resident buyers pay Impuesto de Transmisiones Patrimoniales (ITP) at a flat rate of 7% of the purchase price, while new-build properties from a developer are subject to VAT at 10% plus Actos Jurídicos Documentados (AJD) stamp duty at 1.2%.
- Every property owner in Andalucía pays an annual IBI (council tax) calculated by the local municipality based on the catastral value, typically ranging from 0.4% to 1.1% of that value, plus a separate annual garbage collection tax (basura) that usually falls between €100 and €300 depending on the municipality.
- Non-resident owners who leave their Spanish property vacant and unrented must still pay Impuesto sobre la Renta de No Residentes (IRNR) imputed income tax, calculated as 1.1% of the catastral value (for properties with values revised after 1994) multiplied by the 19% tax rate applicable to EU and EEA residents, or 24% for those outside the EU.
- Non-residents from EU and EEA countries who rent out their Andalucían property are taxed at 19% on net rental income after deducting allowable expenses such as mortgage interest, maintenance, insurance, and IBI, whereas non-residents from outside the EU are taxed at 24% on gross rental income with no expense deductions permitted.
- Rental income declarations for non-residents must be submitted quarterly using Modelo 210, with deadlines falling in April, July, October, and January for income earned in the preceding quarter, and failure to comply exposes buyers to penalties and interest charges from the Spanish Tax Agency (Agencia Tributaria).
Transfer taxes in Andalucia
Transfer taxes in Andalucia — ITP vs VAT/AJD: when each applies and current rates for 2024-2025 The tax you pay on acquisition depends entirely on what you are buying, not where you come from. Resale properties purchased from a private individual fall under Impuesto sobre Transmisiones Patrimoniales, known as ITP. Andalucia applies a flat rate of 7% on the declared purchase price or the fiscal reference value set by the tax authority, whichever is higher. This change, introduced through the 2021 regional budget and maintained through 2025, replaced the previous sliding scale and simplified planning considerably. New-build properties purchased directly from a developer operate under a completely different regime. These transactions attract VAT at 10% for residential dwellings, or 21% for land and commercial premises. On top of VAT, buyers also pay Actos Juridicos Documentados, the stamp duty known as AJD, which in Andalucia currently stands at 1.2% of the purchase price. You cannot choose between these regimes; the legal status of the seller determines which applies automatically. One critical point non-residents frequently overlook: the fiscal reference value introduced nationally in January 2022 acts as a minimum taxable base for ITP purposes. If you negotiate a purchase price below this cadastral-derived figure, Hacienda will still calculate your ITP liability against the higher reference value. Challenging these valuations is possible but involves a formal procedure and professional assistance is strongly advisable before proceeding.
Annual property taxes
Annual property taxes — IBI, garbage tax, community fees: what to budget each year Once you own a property in Andalucía, three recurring costs arrive every year with predictable regularity. Understanding each one prevents unpleasant surprises. IBI, the Impuesto sobre Bienes Inmuebles, is the Spanish equivalent of council tax and your largest annual obligation. It is levied by the local municipality as a percentage of the catastral value, which is typically well below market value. Rates across Andalucían municipalities generally fall between 0.4% and 1.1% of that catastral figure. On a property with a catastral value of 80,000 euros, expect to pay somewhere between 320 and 880 euros annually, depending on your municipality. Marbella, Málaga city, and Seville each set their own rates within the permitted band. The garbage collection tax, or tasa de basura, is a separate municipal charge billed either independently or alongside IBI. Amounts vary considerably but typically range from 100 to 300 euros per year for a standard residential property. Community fees apply if your property sits within a development governed by a homeowners community. These cover shared maintenance, pool upkeep, gardening, and building insurance. Costs are highly variable. A modest apartment might carry fees of 600 to 1,200 euros annually; a villa within a gated urbanisation with extensive facilities can reach 3,000 euros or more. As a non-resident, you remain fully liable for all three charges regardless of how much time you spend in Spain each year.
Non-resident income tax IRNR
Non-resident income tax IRNR — imputed income on Spanish property you don't rent out Even if your Andalucian property sits empty or serves purely as a holiday home, Spain considers you to have received a notional income from it, and taxes you accordingly. This obligation catches many buyers off guard, particularly those who assume that generating no rental revenue means filing no tax return. The calculation works as follows. The Spanish tax authority applies a percentage to your property's cadastral value, which is the administrative value assigned by the municipality and shown on your IBI bill. If the cadastral value has been revised within the last ten years, the rate applied is 1.1 percent. Where no revision has taken place within that period, the rate rises to 2 percent. The resulting figure is your deemed income, and non-residents from EU and EEA countries pay 19 percent tax on that amount. Non-residents from outside the EU and EEA pay 24 percent. You must file form 210 annually, declaring the period of non-rental use. The deadline is 31 December of the year following the tax year in question, so imputed income for 2024 must be declared by 31 December 2025. The sums involved are rarely large, but failure to file accumulates surcharges and interest quickly, and the Spanish tax authority does cross-reference property ownership records. Engaging a gestor or tax representative to handle this annually is straightforward and inexpensive relative to the exposure of non-compliance.
Rental income taxation for non-residents
Rental income taxation for non-residents — rates, deductions, and declaration obligations Non-residents earning rental income from Andalucian property are taxed under the Non-Resident Income Tax law, known as IRNR. The applicable rate depends on your fiscal residency. Owners resident within the European Union, Norway, or Iceland pay 19% on net rental income, meaning allowable expenses can be deducted before the tax is calculated. These deductions include mortgage interest, local property tax (IBI), community fees, insurance premiums, depreciation at 3% of the cadastral construction value annually, and maintenance costs proportional to the rental period. Owners from outside the EU — including post-Brexit UK nationals — pay 24% on gross rental income with no deductions permitted whatsoever, which represents a substantially heavier burden and should factor into any investment calculation. Declarations must be filed quarterly using form 210, with deadlines falling in April, July, October, and January for income earned in the preceding quarter. Periods when the property sits vacant are not declarable as rental income, though some owners incorrectly conflate this with deemed income rules, which are separate. There is no minimum threshold below which you are exempt from declaring. Spanish tax authorities have significantly improved cross-referencing with rental platforms including Airbnb and Vrbo, making undeclared rental income a genuine enforcement risk rather than a theoretical one. Appointing a Spanish fiscal representative is not legally mandatory for EU residents but is strongly advisable for managing compliance accurately.
Capital gains tax on sale
Capital gains tax on sale — resident vs non-resident treatment and the 3% withholding When a non-resident sells property in Andalucía, the gain is taxed under the Non-Resident Income Tax Act at a flat rate of 19% for buyers who are EU or EEA nationals, and 24% for buyers from outside the EU and EEA. Spanish tax residents pay instead under the general income tax scale for savings income, currently ranging from 19% to 28% depending on the size of the gain, with the top rate applying to gains above 300,000 euros. This difference in treatment matters enormously when structuring a purchase and projecting eventual exit costs. The 3% withholding mechanism is one of the most misunderstood aspects of Spanish property transactions. When a non-resident sells, the buyer is legally required to retain 3% of the agreed purchase price and pay it directly to the Agencia Tributaria within 30 days using form 211. This is not an additional tax but an advance payment against the seller's final liability. If the actual gain produces a tax bill below 3% of the sale price, or if there is a loss, the seller can claim a full or partial refund by filing form 210 within four months of the sale completing. Sellers who fail to account for this timing should be aware that refunds routinely take 12 to 18 months to process, so this amount should not be treated as immediately recoverable liquidity in any financial plan.
Inheritance and gift tax in Andalucia
Inheritance and gift tax in Andalucia — the reforms and what they mean for estate planning Andalucia eliminated its regional inheritance and gift tax allowance in 2019, effectively reducing the tax burden on most heirs to near zero. The regional government introduced a 99% bonification on both inheritance and donations between direct relatives, covering spouses, children, grandchildren and parents. In practice, most families pay almost nothing in regional tax. However, non-residents remain subject to state-level rules, and the applicable rates and allowances have historically differed depending on whether the beneficiary lived in Spain or abroad. The European Court of Justice ruled in 2014 that this distinction was unlawful discrimination, and Spain subsequently amended its legislation to bring non-residents into alignment with resident rules. This means a non-resident inheriting Andalucian property can now access the same regional bonifications as a Spanish resident. For properties held directly by individuals, this is genuinely good news. The near-zero rate for direct family inheritance in Andalucia is one of the most favourable positions in Spain. The situation becomes more complicated when assets are held through corporate structures. Companies do not benefit from personal allowances or the 99% bonification, so succession planning for corporate-held property requires careful restructuring in advance. Additionally, the first 700,000 euros of individual assets is exempt from wealth tax under current Andalucian rules, which interacts directly with how you structure ownership before death. Professional advice before acquiring property, not after, makes a significant financial difference here.
The Golden Visa
The Golden Visa — current status after the 2024 announcement and what alternatives exist In April 2024, Prime Minister Pedro Sánchez announced Spain's intention to abolish the property-based Golden Visa, citing housing affordability concerns. As of mid-2025, the visa has not been formally eliminated through legislation, but the political direction is clear and buyers should not structure a purchase around this route. Applications already submitted before any legislative cutoff may still be processed, but relying on a programme under active political threat is poor planning. The Golden Visa required a minimum property investment of 500,000 euros free of mortgage, granting residency rights across the Schengen area. That specific threshold and benefit no longer represents a reliable pathway for new buyers. Practical alternatives exist and are being used successfully by non-resident buyers in Andalucia. The Non-Lucrative Visa suits buyers with sufficient passive income or savings who do not intend to work in Spain. Current requirements include demonstrating approximately 28,800 euros annual income for an individual, rising proportionally for dependants. This visa does not grant the right to work but permits extended residency and is renewable. The Digital Nomad Visa, introduced under the Startup Law in 2023, permits remote workers and freelancers earning from non-Spanish clients to reside in Spain with full work rights. Autonomous community processing times vary considerably, and Andalucia's consular routes have shown faster turnaround than some northern regions. Tax residency implications differ significantly across all three routes and should be modelled before any purchase decision.
Pre-purchase legal checklist
Pre-purchase legal checklist — what your lawyer must verify before you sign Before any non-resident buyer signs a private purchase contract in Andalucía, their Spanish lawyer must complete a series of verification steps that go well beyond a basic title check. Shortcuts here are where transactions unravel. The first obligation is obtaining a full Nota Simple from the Land Registry, which confirms the registered owner, the property's boundaries, and crucially, any charges, mortgages, or liens attached to it. A clean Nota Simple does not, however, confirm that the physical property matches what is registered, so your lawyer must cross-reference this against the Catastro record and verify that built square metres are consistent across both documents. Discrepancies between registered and cadastral descriptions are extremely common in Andalucía, particularly with rural finca properties and any building that predates modern planning controls. Your lawyer must confirm the property holds a valid Licencia de Primera Ocupación or its equivalent Certificado de Primera Ocupación, without which connecting utilities legally is impossible and future resale will be compromised. For any property built after 2007, compliance with Andalucía's urban planning regulations under the LOUA must be verified, and your lawyer should confirm no outstanding expediente de disciplina urbanística, meaning no active planning infraction proceedings, exists against the property. Finally, the community of owners' accounts must be reviewed to confirm no outstanding debts, as under Spanish law the buyer inherits unpaid community fees from the previous owner covering up to three years.
Frequently Asked Questions
- What is the total tax cost of buying a 5M EUR property in Andalucia?
- For a 5M EUR resale property in Andalucia, your total transfer tax (ITP) is 400,000 EUR. Andalucia applies a sliding scale: 8% on the first 400,000 EUR, 9% on 400,001 to 700,000 EUR, and 10% above 700,000 EUR. Add notary fees approximately 3,000 to 5,000 EUR, land registry fees around 2,000 to 3,000 EUR, and legal fees typically 1% of purchase price, so 50,000 EUR. Your total acquisition cost sits around 455,000 to 460,000 EUR, roughly 9.1% to 9.2% on top of the purchase price. For new builds, VAT at 10% plus stamp duty at 1.2% applies instead.
- Do I pay tax in Spain if I only use my property for holidays?
- Yes. Even if you never rent your property, Spain requires non-residents to pay Imputed Income Tax annually. The tax authority assumes you receive a notional rental income from your property. The calculation is 1.1% of the cadastral value (or 2% if the cadastral value has not been revised in the last 10 years), and you pay 19% tax on that figure if you are an EU/EEA resident, or 24% if you are from outside the EU. This must be declared annually using Form 210. Many owners overlook this obligation, but Spanish tax authorities do enforce it.
- What happens to my Spanish property if I die — does my family pay inheritance tax?
- Yes, your heirs will face Spanish Inheritance Tax (Impuesto sobre Sucesiones y Donaciones), even if they live abroad. In Andalucía, this is now highly favourable. Since 2019, Andalucía offers a 99% reduction on the tax liability for direct family members — spouses, children, and parents — meaning most families pay virtually nothing. Non-resident heirs from outside the EU were historically disadvantaged, but a 2015 EU ruling equalised treatment, so all heirs now access the same Andalucían allowances. However, the inheritance must still be formally declared within six months of death. Always structure ownership carefully in advance and seek specialist Spanish legal advice.
- Is the Golden Visa still available for property buyers in Spain?
- No. Spain's Golden Visa program for property investors was officially abolished on April 3, 2025. The Spanish government ended the scheme, which previously granted residency to non-EU nationals purchasing property worth €500,000 or more. Applications submitted before that date are still being processed, but no new applications are accepted. If residency is your goal, alternative visa routes remain available, including the Non-Lucrative Visa and the Digital Nomad Visa introduced under the 2023 Startups Law. We strongly recommend consulting an immigration lawyer to identify the most suitable pathway for your specific circumstances and nationality.
Related Areas
Not sure where to start?
The Costa del Sol has dozens of micro-areas, each with a different character, price point and lifestyle. Tell us what matters to you — privacy, golf, family, views — and we'll send you a curated shortlist of properties that actually fit.
No portals. No noise. Just the right houses.