If you own property in Spain as a non-resident, there are three main taxes to be aware of: IBI, IRNR, and Wealth Tax.
IBI (Local Property Tax)
The IBI (Impuesto sobre Bienes Inmuebles) is an annual property tax paid to your local town hall. It is calculated based on the valor catastral (cadastral value), which is an administrative value typically lower than market price. The rate ranges from 0.4% to 1.1% depending on the municipality.
Set up a direct debit (domiciliación bancaria) to avoid missing payments. Late payments incur surcharges, and in extreme cases, unpaid IBI can result in a lien against the property.
IRNR (Non-Resident Income Tax)
If you own property in Spain but live there fewer than 183 days per year, you are subject to IRNR (Impuesto sobre la Renta de No Residentes). This applies in two scenarios:
Rental income: If you rent out the property, EU/EEA residents pay 19% on net income (expenses deductible). Non-EU residents pay 24% on gross income (no deductions).
Imputed income: Even if the property sits empty, Spain charges a tax on “deemed” income. This is calculated as 1.1% or 2% of the cadastral value, taxed at 19% (EU/EEA) or 24% (non-EU). It is a small amount but mandatory, and many non-residents overlook it.
Wealth Tax
Wealth Tax (Impuesto sobre el Patrimonio) applies to net assets above certain thresholds. The rules vary by Autonomous Community:
- Some regions (like Madrid and Andalusia) have offered 100% rebates, effectively eliminating the tax.
- Other regions (like Catalonia and the Balearic Islands) still levy it on assets above approximately €700,000 per person, with a €300,000 allowance for a primary residence.
In 2023, the central government introduced a “Solidarity Tax” on fortunes over €3 million, which applies even in regions that rebate their own wealth tax. This affects high-net-worth individuals with significant Spanish property holdings.
Compliance
Spain’s tax authority uses data matching to track property ownership, utility bills, and bank records. Non-residents need to file Form 210 annually for imputed income or rental income. Wealth tax returns are filed separately if applicable. Working with a local tax advisor (gestor) helps ensure deadlines are met and forms are filed correctly.
The key takeaway: if you own property in Spain, budget for IBI annually, file Form 210 each year (even if the property is empty), and check whether wealth tax applies in your region. The costs are manageable if you plan for them.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws change frequently, and individual circumstances vary. Always consult a qualified tax advisor before making financial decisions.