Spanish Property Taxes Explained: ITP, IBI, IRNR, and Everything Else

Spanish property taxation uses a lot of acronyms. ITP, IBI, IRNR, AJD, IVA, IRPF — it's enough to make anyone's eyes glaze over. But once you strip away the abbreviations, the system is logical. There are taxes when you buy, taxes while you own, and taxes when you sell. Here's each one explained in plain English.

Taxes When You Buy

ITP — Transfer Tax (Resale Only)

This is the big one on resale purchases. ITP (Impuesto sobre Transmisiones Patrimoniales) is the equivalent of stamp duty in England, but typically higher. Rates are set by each autonomous community:

Region	ITP Rate	Notes
Andalusia	7%	Flat rate — one of the lowest in Spain
Valencia	10% (dropping to 9% from June 2026)	Currently flat rate; reducing from June 2026
Catalonia	10–13%	Progressive rates since June 2025: 10% up to €600K, rising to 13% above €1.5M. 20% surcharge for large holders (10+ properties)
Madrid	6%	Lowest in Spain
Balearic Islands	8–13%	Progressive scale
Canary Islands	6.5%	Flat rate

On a €500,000 resale in Andalusia: €35,000. In Valencia: €50,000. In Catalonia (above €1.5M): up to 13%. The region you buy in has a real impact on your total costs.

IVA — VAT (New-Build Only)

New-build purchases pay VAT (IVA — Impuesto sobre el Valor Añadido) instead of ITP. The rate is 10% on residential property across all of Spain. On a €500,000 new-build: €50,000.

AJD — Stamp Duty

AJD (Actos Jurídicos Documentados) applies to new-builds and mortgage deeds. Regional rates vary from 0.5% to 1.5%. Andalusia charges 1.2%. On a €500,000 new-build in Andalusia: €6,000.

Taxes While You Own

IBI — Council Tax

IBI (Impuesto sobre Bienes Inmuebles) is the closest equivalent to UK council tax. It's an annual municipal tax based on the catastral value (valor catastral) — a government-assessed value typically well below market value. Rates are set by each municipality, usually between 0.4% and 1.1% of catastral value.

For a typical Costa del Sol apartment with a catastral value of €100,000: €400–1,100/year. For a luxury villa with a catastral value of €500,000: €2,000–5,500/year.

IBI is paid annually, usually in September or October. Your bank can set up a direct debit.

IRNR — Non-Resident Income Tax

If you own property in Spain but are not a Spanish tax resident, you owe IRNR (Impuesto sobre la Renta de No Residentes) every year. There are two scenarios:

If you don't rent the property out: Spain imputes a notional rental income and taxes it. The calculation: 24% x (2% of catastral value) for non-EU residents. If the catastral value was revised in the last 10 years, it's 1.1% instead of 2%.

On a property with a catastral value of €150,000 (recently revised): 24% x 1.1% x €150,000 = €396/year.

If you rent the property out: You pay 24% on gross rental income. No deductions for expenses — that's the key difference for non-EU residents. EU residents pay 19% and can deduct expenses like mortgage interest, maintenance, insurance, and community fees. This is one of the clearest post-Brexit penalties affecting UK property owners in Spain.

Wealth Tax (Impuesto sobre el Patrimonio)

If your net assets in Spain exceed €700,000 (the general exemption in most regions), you may owe Spanish Wealth Tax. Rates range from 0.2% to 3.5% depending on the region and the total value. Andalusia historically offered generous exemptions; other regions vary. Madrid has effectively abolished it for residents.

This is relevant for buyers with multiple properties or high-value single properties. Your Spanish tax adviser should model this before purchase.

Taxes When You Sell

Capital Gains Tax

When you sell, any profit is subject to Capital Gains Tax. For non-residents: 19% on the gain. The gain is calculated as sale price minus purchase price, minus documented improvement costs, adjusted for inflation coefficients (currently frozen, but subject to change).

On a property purchased for €400,000 and sold for €550,000 with €20,000 in documented improvements: gain = €130,000. Tax = €24,700.

The 3% Retention

When a non-resident sells property in Spain, the buyer is legally required to withhold 3% of the total sale price and pay it directly to the Hacienda (tax office) as a deposit against the seller's capital gains liability. If your actual tax is less than the 3% withheld, you reclaim the difference via a tax return. This typically takes 6–12 months.

Plusvalía Municipal

This is a municipal tax on the increase in land value since the last transfer. The calculation has been reformed and now uses either a "real" method (based on actual gain) or an "objective" method (based on catastral value and years of ownership), with the taxpayer entitled to whichever is lower. If you sell at a loss, you don't pay. This was a major 2021 reform following a Constitutional Court ruling.

The UK–Spain Double Tax Treaty

The UK and Spain have a double taxation agreement that prevents you from being taxed twice on the same income. In practice, this means you can offset Spanish property taxes against your UK tax liability (and vice versa). How this works depends on your specific situation — your UK and Spanish tax advisers should coordinate.

The most expensive mistake you can make is not getting professional tax advice before you buy. Spanish property taxation is not complicated, but it is different from the UK system, and the post-Brexit rules for non-EU residents are consistently less favourable. Know the numbers before you commit.