Spanish property tax for UK buyers (2026 guide)

Spanish property tax for UK buyers can be complex, involving different obligations for purchasing, owning, and selling. Understanding property tax in Spain – including transfer tax (ITP), annual property tax (IBI), and capital gains tax – is essential for UK residents to avoid unexpected costs and make sure you’re compliant with both the Spanish Tax Agency (Agencia Tributaria) and HMRC.

While this guide covers the key rules and typical scenarios, it’s always worth speaking to an experienced tax professional for advice tailored to your specific situation.

At a glance: 2026 tax rates for UK buyers

• Purchase tax (resale): 6-10% (Note: Valencia drops to 9% in June 2026).

• Purchase tax (new build): 10% VAT and 0.5-1.5% stamp duty.

• Annual tax (IBI): 0.4-1.3% of cadastral value.

• Selling (capital gains): 19% for non-residents (with a 3% retention).

What taxes do UK buyers pay when purchasing property in Spain?

There are three main taxes UK buyers may need to pay when purchasing property in Spain: transfer tax (ITP), VAT (IVA/IGIC), and stamp duty (AJD).

In total, most buyers will typically pay around 6% to 13% of the purchase price in property taxes, depending on the property type and location.

While tax rates vary slightly between regions, the key distinction is whether you’re buying a new-build or a resale property, as these are taxed differently.

Quick overview of the main taxes when buying property in Spain

The table below summarises the main property taxes in Spain for UK buyers:

For a full breakdown of additional purchase costs (including legal and notary fees), see our costs of buying property in Spain guide.

Transfer tax (ITP) on resale properties

If you’re buying a resale property in Spain, you’ll usually pay transfer tax (ITP) instead of VAT. This is the most common purchase tax for UK buyers.

Rates vary by region but typically fall between 6% and 10% of the purchase price, with some regions applying slightly higher rates (up to 13%) for more expensive properties and reduced rates for young buyers, large families and people with disabilities when purchasing a primary residence.

Rates can also change over time. For example, in the Valencian Community (including the Costa Blanca), the standard ITP rate is due to reduce from 10% to 9% for properties under €1 million from 1 June 2026 (Law 5/2025).

As the buyer, you’ll usually need to pay ITP within 30 days of completing the purchase using the Modelo 600 Spanish tax form.

VAT (IVA), IGIC and stamp duty (AJD) on new properties

If you’re purchasing a new-build property, you’ll pay VAT (IVA) on the Spanish mainland instead of ITP, and this is charged at 10%.

In the Canary Islands, VAT is replaced by IGIC, which is typically charged at 7% on new-build residential property.

You’ll also need to pay stamp duty (AJD), which varies by region but usually ranges from 0.5% to 1.5% of the purchase price.

These taxes are usually paid at the point of completion, alongside the purchase transaction.

What ongoing taxes do UK residents pay on Spanish property?

After you’ve purchased a property in Spain, there are several ongoing taxes you may need to pay as a UK buyer. The key tax is the annual Impuesto sobre Bienes Inmuebles (IBI), which is typically 0.4% to 1.3% of a property's cadastral value.

Non-residents also usually need to pay tax on rental income, or ‘imputed’ income if the property isn’t rented out.

Quick overview of ongoing taxes for owners of Spanish property

The table below summarises the main ongoing taxes for owners of Spanish property, including UK residents:

IBI (local property tax)

The Impuesto sobre Bienes Inmuebles (IBI) is the main annual property tax in Spain and it applies to all property owners, including UK residents.

It’s similar to council tax in the UK and is calculated based on the property’s cadastral value, which is typically lower than its market value.

Rates usually range between 0.4% and 1.3%, depending on the region, and you pay the tax once a year to the local authority.

You’ll also need to pay a waste collection charge (basura), which will either be included in the IBI bill or charged separately. This fee varies widely depending on region, property size and location. As a rough guide, it can cost anywhere between €50 and €300 a year.

Non-resident income tax (imputed income)

If you own property in Spain but don’t rent it out, you may still need to pay a form of income tax. This is known as non-resident income tax (IRNR) on imputed income, and it’s based on the idea of what your property could earn if you were to rent it out.

Your imputed income is calculated as 1.1% of the property’s cadastral value, if this value has been updated within the last ten years. If it hasn’t been updated, your imputed income is 2% of the cadastral value.

This imputed income is then taxed at 19% for non-residents from the EU or EEA and 24% for non-residents from outside the EU, including buyers based in the UK.

For example, if your property has a cadastral value of €100,000 and it hasn’t been updated recently, the taxable value would be €2,000 (2%). At 24%, this would result in an annual tax bill of €480.

Rental income tax

If you rent out your Spanish property, you’ll pay tax on the income generated. The rate depends on your tax residency status.

Non-residents from within the EU are taxed at 19% on their net income, meaning you can deduct certain expenses such as maintenance and management costs.

For non-residents outside the EU, including UK buyers, the tax rate is 24%. Historically, this has been applied to gross income, meaning you wouldn’t be able to deduct expenses.

However, a landmark 2025 court ruling challenged the rule preventing non-EU owners from deducting expenses. The ruling is not yet final and may be appealed to the Supreme Court, so how it will be applied in practice is still evolving.

It may be worth speaking to a Spanish tax expert to understand how this could affect your situation and whether you should appeal, particularly if you're paying or have paid tax on gross rental income.

Wealth tax

Spain applies a wealth tax on high-value assets, including property owned by non-residents.

In most cases, the tax only applies once your net assets exceed €700,000 per person, after any allowances. Rates are progressive, starting at around 0.2% and rising to 3.5% for higher-value holdings.

It’s important to note that wealth tax rules vary significantly across Spain, and some regions offer generous reliefs. For instance, Madrid and Andalusia currently apply a 100% exemption.

However, Spain also applies a national ‘solidarity tax’ on large fortunes, which affects individuals with net assets exceeding €3 million. Although it was originally introduced as a temporary measure, it has since been extended indefinitely and applies even in regions where wealth tax is reduced or eliminated.

What taxes do you pay when selling property in Spain?

When you sell a property in Spain, you’ll typically need to pay capital gains tax (CGT) and plusvalía tax. For non-residents, capital gains tax is usually charged at a flat rate of 19%, and 3% of the sale price is withheld at completion as an advance payment towards this tax.

The exact amount you pay depends on your residency status, how much profit you make, and how long you’ve owned the property.

Taxes when selling a property in Spain as a UK resident

Capital gains tax (CGT) on Spanish property

When you sell a property in Spain, you’ll usually need to pay tax on any profit (capital gain) made on the sale. This is calculated as the difference between the purchase price and the sale price, after deducting allowable costs such as legal fees and improvements.

For most UK-based owners, who are classed as non-residents, capital gains tax is typically charged at a flat rate of 19%. If you’re a Spanish tax resident, different progressive rates apply, currently ranging from 19% to 30% depending on the size of the gain.

3% retention for non-residents

If you’re a non-resident selling property in Spain, the buyer is required to withhold 3% of the sale price and pay it directly to the Spanish tax authorities.

This isn’t an additional tax, but an advance payment towards your final capital gains tax liability. After the sale, you need to submit a tax return (Modelo 210) to calculate the actual amount owed. If your total tax bill is lower than the amount withheld, you can claim a refund; if it’s higher, you’ll need to pay the difference.

You must usually file this return within four months of the sale date, so it’s important to act promptly to settle your tax position and reclaim any overpayment.

Because this retention is deducted automatically at completion, it’s important to factor it into your expected proceeds.

Plusvalía tax (municipal capital gains tax)

In addition to national taxes, you may also be liable for plusvalía, a municipal tax on the increase in the value of the land your property sits on.

Unlike capital gains tax, plusvalía is based on the cadastral value of the land and the length of time you’ve owned the property, rather than the actual sale price. The exact amount varies depending on the local council.

Recent reforms mean that in some cases you may not have to pay plusvalía if there has been no increase in value. In others, you may be able to choose between calculation methods, depending on which produces the lower tax liability.

Example: capital gains tax on Spanish property sale

For example, if you bought a property for €250,000 and later sold it for €300,000, your capital gain would be €50,000. If you had €10,000 in allowable costs (such as legal fees or improvements), your taxable gain would reduce to €40,000.

As a non-resident, this gain would typically be taxed at 19%, resulting in a tax liability of €7,600. However, the buyer would have already withheld 3% of the sale price (€9,000) at completion.

In this scenario, you would be due a refund of €1,400 after submitting your tax return.

Spanish property tax for UK residents

As a UK resident, there are some other important things to consider when it comes to Spanish property tax, including your reporting obligations in the UK, how residency impacts taxes, and what role currency exchange plays.

Double taxation and reporting Spanish income to HMRC

The UK and Spain have a double taxation agreement, which means you won’t usually be taxed twice on the same income.

However, if you’re a UK resident, you’ll still need to declare worldwide income and gains to HMRC, including rental income and profits from selling Spanish property.

In most cases, you’ll pay tax in Spain first. Any amount due in the UK can then be reduced by the tax already paid overseas.

Residency status and taxation

Your tax obligations depend on your residency status, with different rules and rates for Spanish residents, non-residents from the EU/EEA and non-residents from outside the EU, including the UK.

As a UK resident, you’ll typically only be taxed in Spain on Spanish-earned income. However, spending more than 183 days a year in Spain or having your main economic interests there can change your status and how you’re taxed.

If you plan to move to Spain, such as for retirement, it’s worth considering how it could impact your tax status. Find out more about how to retire in Spain from the UK.

Exchange rates and currency volatility

One crucial but often overlooked factor for UK residents paying Spanish property taxes is currency exchange.

Exchange rates are always moving, and even small shifts in the pound-to-euro rate can significantly impact how much you pay in Spanish property taxes.

It’s best to plan your currency transfers in advance and seek expert support from a specialist currency broker, rather than leave overseas payments to the last minute. Learn more about transferring money when buying property in Spain.

FAQs about Spanish property taxes for UK buyers

Do UK residents pay tax in Spain?

Yes. If you are a UK resident and own property in Spain, you may need to pay Spanish tax on Spanish-sourced income and assets. This can include property-related taxes such as IBI (local property tax), non-resident income tax, rental income tax, and capital gains tax when selling.

However, Spain and the UK have a double taxation agreement, so you won’t usually pay tax twice on the same income. You may still need to report it in the UK.

What is IBI in Spain?

IBI (Impuesto sobre Bienes Inmuebles) is an annual local property tax in Spain, similar to council tax in the UK. It is paid by all property owners and is based on the property’s cadastral value, which is typically lower than the market value.

Rates usually range from 0.4% to 1.3%, depending on the municipality.

Do I pay UK tax on Spanish property?

If you’re a UK tax resident, you must declare worldwide income and gains to HMRC. This means you may need to pay UK tax on rental income or profits from selling Spanish property.

In most cases, any tax already paid in Spain can be offset against your UK tax liability under the UK-Spain double taxation agreement, so you’re not taxed twice.

What is capital gains tax in Spain?

Capital gains tax in Spain is charged on the profit made when selling a property. For non-residents (including most UK buyers), it is typically taxed at a flat rate of 19% on the gain.

Spanish tax residents pay progressive rates ranging from 19% to 30%, depending on the size of the gain.

How long do I have to claim back the 3% retention after selling?

You must file Modelo 210 within four months of the sale to claim your refund.

Is there inheritance tax on Spanish property?

Yes. Spain applies inheritance tax (Impuesto sobre Sucesiones y Donaciones) on property passed to heirs, including for non-residents.

The amount you need to pay depends on factors such as the value of the property, your relationship to the deceased, and the region where the property is located.

Some regions offer significant reductions, but rules vary widely, so professional advice is usually recommended.

What is the ITP rate in Valencia for 2026?

Starting 1 June 2026, the ITP rate is 9% for properties up to €1 million.

Can UK residents deduct expenses from Spanish rental income in 2026?

Not usually on a standard tax return. While a 2025 court ruling (SAN 3630/2025) supports the idea that non-EU residents, including UK landlords, should be able to deduct certain expenses, this hasn’t yet been fully reflected in how the tax system operates in practice.

It’s best to seek the advice of an experienced Spanish tax expert.