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Buying property in Spain
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10 Charnwood Close
The Country Park
L12 0LQ

t:   0845 108 2209
m: 0790 220 4779




The sale tax on a propertyis 7 % on the price of the property, but can be 16% if you buy from a promoter or property company. This tax is applicable for new properties.
ITP (Impuesto de Transmisiones Patrimoniales)
The transfer tax is 7% on the price of purchase and is applied if you’re buying property in Spain from a private person.
For second hand properties. This Spanish tax has to be paid in all the situations where the IVA (VAT) tax is not applicable.
These taxes are calculated on the value declared in the public title deed (escritura pública)
Notary Fees and Property Registration Fees
Notary Fees (honorarios de notario): Notary fees are paid normally by the buyer of the property. These fees are fixed on official scales, depending on the size of the property.
The notary will draw up the need and will check that the contract, documents and licences are in accordance with the Law in Spain when buyer and seller sign the Purchase Contract (Contrato de Compra-Venta).
Property Registry Fees: (Registro de la Propiedad): When you’re buying property in Spain, you have to pay the registration of the deed at the Spanish Property Registry. Then the property can be transferred to you. Before going to the registry, you should pay the corresponding taxes, and give to the Register the receipts of the taxes paid in order to be allowed to make the registration.
Who is responsible for paying the taxes in the process of buying property in Spain?

  • The buyer pays: IVA or ITP, Notary fees and Property Registration fees.
  • The seller pays: Capital Gains tax and Plusvalia.

Necessary documentation to pay taxes when buying property in Spain: To pay these taxes you have to get the Spanish Identification number, NIE (mumero de identificación extranjero) and the Fiscal Number NIF (numero de identificación fiscal).
This tax is charged on the increase of the value of the land (not the building)since the last time the property was sold.
Normally you don’t have to pay this tax when you’re buying property in Spain, this is normally paid by the seller, but it could be paid by the buyer if both parts agree in the purchase contract this option.
IBI – Impuesto de bienes inmuebles.
IBI s a local property tax, payable every year by the owners of the property, residents and non-residents, to the Town Hall where the property is registered.
The local property tax is based on the property catastral value (valor catastral), which is the official value of your property, with a lower value than the property real market price.
The IBI tax rate depends on the size of the city or village where you’ve found your property and is revised every 10 years.
Municipal Governments normally allow the payment to be made by direct debit to a bank account, which makes it easy for the taxpayer to pay the tax before the deadline and thus avoid surcharges.

The period for payment varies depending on the municipality, but it is normally around the months of September, October and November each year.


If you’re looking for Spanish villas you have to be informed about the personal taxes you’ll have to pay.
This tax is applied for Spanish residents, living in Spain more than 183 days per year, on their world earnings, and they have to complete an Income tax form every year, during May or June of the following year.
People earning more than € 21,035.42 a year in Spain, are obliged to make the income tax declaration and a progressive tax structure is applicable to the world income of the year, with a starting rate of 17 % up to 48 %.
Is recommendable to ask your gestor or lawyer for help and advice on your annual declaration tax.
In order to avoid the double taxation, Spain has made tax agreements with different countries; it’s useful for example if you live part of the year in yourSpanish villaand the rest of the year in England. These agreements allow you to deduct the income tax paid in your country. If your country does not have this agreement you can ask for direct deduction of foreign tax paid or foreign compensation.
Non-residents living in Spain more than 183 days are considered Spanish tax payers, even if they have not obtained their residence permit and have to declare their worldwide income to the Spanish Tax Department (Hacienda), completing the same forms as the Spanish residents.
The Spanish Tax Ministry is called AGENCIA TRIBUTARIA, and has a telephone Information Services to help the tax payers and also the possibility of making the Income tax online, using a computer program named P.A.D.R.E. Other option to make your Income tax when you’re living in Spain, is presenting the Tax Forms in the Tax Office where you live or, if you don’t know how to fill the forms, use the service the Agencia Tributaria offers: make an appointment with a Spanish tax agency staff who will process your Income Tax documents online, helping you to plug your declaration into the PADRE program(remember to take with you all the receipts, bank statements, title deed of your property to the tax office)

  • Telephone for online Income tax: 901 33 66 33
  • Telephone for making an appointment with a tax agency staff: 901 22 33 44
  • Telephone for answering queries: 900 333555 (free call)

When your tax declaration is ready, you can present it at the Tax Agency or at your Bank.
Non-residents are liable for this tax on any Spanish income, such as a money deposit with a Spanish bank, an income derived from any business in Spain…
Buying villas in Spain constrain you to declare your property income, and the Spanish tax system calculate the tax amount based on the cadastral value (valor catastral), Tax base rate is 25% of a 2% of the cadastral value, and is paid every year.
Remember to pay this Income tax every year, if not, probably you will be charged by the Spanish Tax Agency when you want to sell your Spanish villa in the future.
For more information visit the Agencia Tributaria for non residents www.aeat.es/normlegi/noreside/english/home.html
FORM NON RESIDENTS 211 , 212, 213 y 214

Capital gains mean that the value of your assets is increased as the result of the sale of your property and is subject to taxation. When a change in ownership of a Spanish villa takes place, the income is considered due for tax. The taxable amount is the difference between the purchase value declared on the property deed and the value to be declared on the sale property deed, excluding interest rates and taxes related to the purchase process.
The Spanish tax administration applies a formula base on the date of purchase of the Spanish villa. The consequence is that the Capital gains are reduced in accordance with the number of years you own the property.

Buying property in Spain in


1994 and before










A Non resident owner of a Spanish villa offering it for sale will pay 35% on the net gain after selling it, and a retention of 5 % will be made by the buyer in the registered sales price and this amount will be paid to the Spanish tax agency as a guarantee for tax payments, in order to avoid that the non resident seller “forget” to pay the Capital tax Gains.

Once the Spanish villa is sold, residents will pay 20% on the net gain and it is not necessary to make a retention on the sales price, including the capital gains on the next annual Income tax Declaration
Spanish residents and also non resident owners of Spanish villas are liable to pay wealth tax on their worldwide assets and property in Spain. This tax is paid in May/June of the following year, in addition to the Income tax Declaration.

  • Non Residents pay this Spanish tax without deductions
  • Residents have deductions in their worldwide assets:
  • Individual allowance: €108,182.18 (€216,364.36 for a married couple).
  • Own property: rise to €150,253.03 (€300,506.06 for a married couple when the property is the main residence).

The wealth tax applies only to assets with a value above 170,000 euros. The tax rate starts at 0.2% and rises to 2.5% for properties with a value above 10,695,996 euros. The value of your Spanish villa is the official catastral value included in the IBI receipt
Wealth tax rates in Euros:

Tasable Base

Rate band

Tax Rate

Total Tax Payable at top of band


































SPANISH TAX ON VEHICLE (Impuesto de Circulación)
This local tax is based on the volume of the motor. The tax which ranges from 15 to 100 euros, is increased by a percentage in same cities with a bigger number of inhabitants. For an average car, it is about 60 euros a year, and it is only payable if you have a car registered on a Spanish licence plate.
This Spanish tax is paid once a year, normally in March/ April and the bill must be presented in the tax collecting municipal agency.
A car registered in one of the countries of the European Economical Space can be registered in Spain without paying IVA (VAT) or Customs.
Spanish inheritance tax is payable on the increase of wealth asset by the inheritor, obtained by reason of death.
Gift tax is based on the increase of wealth, produced by reason of gift while the transferor / donator is still living.
Who is responsible for paying this tax?
The tax is payable by the heirs or beneficiaries if they are residents and the assets are located in Spain
When and where the inheritance and gift tax have to be paid?

  • Inheritance tax has to be paid the following six months after becoming the new Spanish property owner or receiving the assets, in accordance with the last will.
  • Gift tax will be paid in the following 30 days after the date of the transfer.

These taxes will be paid at the Provincial Tax Office (Delegación Provincial of the Consejería de Economía y Hacienda) in your nearest town.
Reduction on the Inheritance tax:
The amount to deduct from the inheritance tax depends on the relation with the deceased. The conditions are:

  • The inheritors (wife/husband, children or parent) are also residents in Spain (for at least 3 years)
  • The property was the principal residence/family home of the deceased
  • The inheritor will not sell the property for the next 10 years; If they sell it, they have to pay the inheritance tax.

You should ask for legal advice in regards to the tax liability and the maximum amount for this exemption. The amount to pay in taxes depends on the relationship with the deceased.
Applicable tax rate:

Net value of donations in euros

Degree of consanguinity Class





From 0 to € 402,678.11




From € 402,678.11 to € 2.007,380.4




From € 2,007,380.4 to € 4.020.771




Over € 4.020.771




Group 1: children, adopted children, grandchildren, spouses, parents, grandparents (direct relatives).
Group 2: cousins, nieces, nephews, more distant relatives (descendants and ascendants).
Group 3: others, including unmarried couples.
COMPANY TAX (Impuesto de Sociedades)
Is a direct tax on corporate profits obtained within the taxation period, which normally coincides with the calendar year, unless a different period is stated in the company's articles of association.
In any of the cases the tax period cannot exceed 12 months. Spain's standard corporate income tax rate is 35%.
Small and medium size companies with yearly sales of less than 3 million euros may qualify for certain tax incentives:

  • Tax rate of 30% applicable to the first 90,000 euros of taxable income.
  • Accelerated depreciation of certain fixed assets.
  • 10% tax credit for investments and cost in internet, information technology, and communications.

BUSINESS TAX (I.A.E. Impuesto de Actividades Económicas)
Annual tax to be paid on the exercise of a business, professional, or artistic activity.
There is a large number of small businesses that don’t need to pay this tax to stimulate small business creation: this include those professionals or business that turn over less than 600.000 euros per year.

This tax rate depends on many factors, such as size and location of the business, the type of business, and number of employees, and has to be paid in the Spanish tax agency (Agencia Tributaria)


If you are planning moving to Spain or buying Spanish villas, for example, first of all, you have to get the Spanish Identification number, NIE (número de identificación de extranjero) and the Fiscal Number NIF (número de identificación fiscal) to pay the taxes.
NIE –Foreign Identification Number
A NIE number should be obtained as soon as possible from the nearest Local Police Department / “Comisaría de Policía”.
Download your NIE form here.
This number is necessary for :

  • Selling or buying Spanish villas
  • Inheritance in Spain
  • Apply for a business permit
  • Apply for opening a bank account, mortgages and other type of loan.
  • Pay Spanish taxes
  • Apply for a driving license in Spain and validate driving licenses issued in EU and non-EU countries.

NIF - Fiscal Identification Number
If you would like to buy or sell a Spanish villa, this number is indispensable, it is also required to open a bank account, to pay taxes, to fill forms… and also to go into business. You need this number, for example, if you have decided to open a shop in Spain or if you are the heir to a Spanish property. You can apply for it to the Local Tax Administration (Delegación de Hacienda) or maybe your lawyer o gestor can arrange it for you.
- For Spanish citizen this number is the same as the National Identity Number “DNI”, followed by a letter.
- For foreign people, the number is the Foreign Identity Number, "NIE", and starts with an “X” followed by seven numbers and a letter.


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