Taxes and costs when buying property in Spain as a non-resident

01Two tax routes: resale or new build — never both

Every purchase in Spain follows exactly one of two tax routes, and which one applies is decided by what you buy, not by anything you can negotiate. A resale home bought from a private owner is charged transfer tax (ITP — Impuesto sobre Transmisiones Patrimoniales). A new build bought from the developer is charged VAT (IVA) plus stamp duty (AJD — actos jurídicos documentados). You pay one route or the other, never both.

Transfer tax (ITP) is a regional tax: each autonomous community sets its own rate, and rates change. As examples of the current spread: Madrid charges 6%, Andalucía 7%, Cataluña 10% (with a higher band above roughly €1M), and Comunidad Valenciana 10% — always check your region’s current rate before budgeting, because the difference between 6% and 10% on the same house is tens of thousands of euros.

On a new build from a developer you instead pay VAT (IVA) at 10% for residential property — in the Canary Islands the local IGIC applies instead of IVA — plus stamp duty (AJD), which is again regional and runs roughly 0.5%–1.5% depending on the community. Check your region’s current rate here too.

The practical consequence: before you compare two properties, work out which tax route each one is on. A “cheaper” new build can end up costing more than a resale once you add 10% IVA plus AJD, and vice versa in a low-ITP region.

02The reference-value trap (valor de referencia)

Since 1 January 2022 (Ley 11/2021), the taxable base for transfer tax is not automatically the price you paid. It is the higher of two numbers: your actual price, or the Cadastre’s official reference value (valor de referencia) assigned to that property. If the reference value is above your price, you owe tax on the reference value — even though you never paid that amount.

This is where foreign buyers get burned. You buy at €200,000, pay ITP on €200,000, and months later a supplementary assessment (liquidación complementaria) arrives because the property’s valor de referencia was €240,000. Now you owe the difference plus, potentially, interest.

The reference value can be challenged — through a rectification request (rectificación) or an appeal (recurso) — but the sequence matters: you must pay or declare on the reference value first and dispute it afterwards. Declaring on the lower price and hoping is not a strategy; it is an invitation for the complementaria.

The defensive move is simple and cheap: look up the property’s valor de referencia on the Cadastre’s site before you sign anything, and put that number into your budget next to the price. If there is a large gap, you want to know it at the deposit-contract stage, not at the tax office.

03Everything else on the bill: notary, registry, gestoría, lawyer

Beyond tax, the deed itself generates a stack of professional fees. None of these are fixed by a single legal price tag — notary and registry fees follow official scales (aranceles) that depend on the property value and the length of the deed, so treat the following as market-practice ranges, not law:

• Notary (purchase deed). Typically around €600–1,200 in practice, depending on price and complexity of the deed (escritura).
• Land registry. Registering your title usually runs around €400–800 in practice.
• Administrative agent (gestoría). The office that files the taxes and walks the deed through the registry. Fees vary and are negotiable — ask for the quote in writing before completion day.
• Independent lawyer. Not mandatory, but for a non-resident buyer usually the best money in the whole deal: contract review, charge checks, tax-route confirmation. Agree the fee in advance.

If you buy with a mortgage, the law splits the loan costs for you. Under Ley 5/2019, the bank pays the notary, registry and gestoría fees of the mortgage deed and its stamp duty (AJD on the loan). What stays with you is the property valuation (tasación) — around €300–600 in market practice. Note the boundary: Ley 5/2019 covers the loan deed only; the purchase deed costs above are still yours.

04Two traps specific to non-resident deals

Two rules catch foreign buyers precisely because nobody expects the buyer to be liable for the seller’s taxes. Both belong in your contract review, not in your post-completion surprises.

Trap one: the municipal capital-gains tax (plusvalía municipal, IIVTNU). By law this is the seller’s tax — it taxes the increase in land value while the seller owned the property. But when the seller is a non-resident, article 106.2 of the local-tax law (TRLHL, RDLeg 2/2004) makes the buyer the substitute taxpayer (sustituto del contribuyente): the town hall can collect the plusvalía directly from you. In any deal where the seller is non-resident — very common on the coasts — this must be priced and secured in the contract, for example by retaining the amount at completion.

Trap two: buying from a non-resident seller. Here the buyer has an active duty: you must withhold 3% of the purchase price and pay it to the tax office in the seller’s name using form modelo 211, within one month of the deed (art. 25.2 TRLIRNR). This is your obligation, not the seller’s — and if it is not done, the property itself answers for the tax. Your notary and gestoría should handle the filing, but the liability sits on your side of the table, so confirm it explicitly. We cover the seller’s side of this — the refund — in the 3% retention guide.

05What it costs to own, after the purchase

The purchase bill is one-off; ownership has its own recurring lines, and as a non-resident you should budget them from year one. The annual property tax (IBI) is billed by the town hall. The non-resident income tax (IRNR) is filed by you on form modelo 210 — even if the property is empty, Spain taxes non-resident owners on an imputed income, and nobody sends you a reminder. And if the property sits in a building or urbanisation, the community of owners (comunidad de propietarios) charges its regular fees plus any extraordinary levies.

Each of those is its own topic with its own deadlines — the modelo 210 guide linked below walks through the non-resident tax in detail. For this article, the point is simpler: put IBI, IRNR and comunidad into the spreadsheet before you buy, not after.

06The budget checklist before you sign anything

All of the above condenses into a short list. Run it before you sign the reservation or deposit contract — because that is the moment your money goes at risk, not the notary appointment:

• Identify the tax route. Resale → transfer tax (ITP) at your region’s current rate; new build → 10% IVA + AJD. One or the other, never both.
• Look up the valor de referencia in the Cadastre and budget tax on the higher of price vs reference value.
• Add the fee stack: notary, registry, gestoría, lawyer — and the tasación if you borrow (the bank pays the loan-deed costs under Ley 5/2019).
• Budget ~10–15% on top of the price overall — market practice for a non-resident purchase, not a legal figure, but a realistic one.
• Check the seller’s residency. Non-resident seller → you must withhold 3% and file modelo 211 within a month, and the plusvalía can be collected from you as sustituto del contribuyente. Both belong in the contract.
• Order a fresh land-registry extract (nota simple) — charges and debts on the property become your problem at completion.
• Have the deposit contract (contrato de arras) reviewed before signing — including who pays which taxes and costs. That clause is negotiable exactly once: before your signature.