International buyers purchasing property in Spain pay between 10% and 13% in total acquisition costs on top of the agreed purchase price, with the precise figure determined by one variable above all others: whether the property is a new build or a resale.
Spain’s property tax structure is more considered than many international buyers initially expect. The country applies different tax regimes depending on property type, and regional governments set their own rates within national frameworks. Andalusia, which encompasses Marbella, Estepona, and the broader Costa del Sol, reformed its transfer tax in 2021 and currently applies some of the most buyer-friendly rates in Spain.
For capital-aware buyers, understanding the tax position before negotiating a purchase price is not administrative detail. It is material to the economics of the transaction. A clear picture of obligations at acquisition, during ownership, and at exit determines whether a specific asset is structured correctly for your circumstances.
Resale Properties: Transfer Tax (ITP)
When purchasing a second-hand property in Spain, buyers pay Impuesto de Transmisiones Patrimoniales, commonly referred to as ITP. This is a regional tax, and rates vary between autonomous communities. In Andalusia, the rate is a flat 7% of the taxable base, which is the higher of the declared sale price or the property’s official cadastral reference value. This flat structure has applied since 2021, replacing an earlier progressive scale.
Other regions apply different rates. Catalonia charges a standard 10%, while Madrid applies 6%. Buyers active across multiple Spanish markets should account for these differences during their target-setting process. For those focused on Andalusia, 7% is the operative figure for any resale acquisition.
ITP is paid by the buyer within 30 business days of signing the notarised purchase deed. It does not apply to new-build purchases, where a separate regime governs the tax position.
New-Build Properties: VAT and Stamp Duty
New-build residential property in Spain is subject to IVA (VAT) rather than ITP. The standard rate is 10% of the purchase price, applied nationally. Social housing (VPO) is taxed at a reduced rate of 4%, though this category is largely irrelevant for the prime market.
In addition to VAT, new-build buyers pay Actos Jurídicos Documentados (AJD), which is Spain’s stamp duty equivalent. In Andalusia, the standard AJD rate is 1.2% of the deed value. Reduced rates are available for buyers purchasing a main residence who meet specific criteria relating to age, family size, or disability status, though these reductions rarely apply to international buyers acquiring investment or secondary residences.
The combined new-build position in Andalusia is therefore approximately 11.2% before professional fees. For buyers considering prime Costa del Sol new developments, this figure should be factored into the initial acquisition modelling alongside notary costs, land registry fees, and legal representation.
Ongoing Ownership Taxes
Once a property is held, owners in Spain face several recurring tax obligations. The primary annual charge is the Impuesto sobre Bienes Inmuebles (IBI), which functions similarly to council tax in the United Kingdom. Local authorities set IBI rates, and the charge is calculated against the cadastral value of the property, not the market price. For most prime properties in Andalusia, the annual IBI is relatively modest in relation to asset value.
Non-resident owners who do not rent out their property are subject to a notional imputed income tax, calculated as a percentage of the cadastral value. For EU and EEA nationals, the rate is 19% of 1.1% of the cadastral value per year. For non-EU nationals, a 24% rate applies. This charge acknowledges the potential income benefit of holding a Spanish property without generating rental income, and it tends to be modest in absolute terms for most buyers.
Owners who do rent their Spanish property to third parties pay non-resident income tax on rental profits. EU and EEA residents are taxed at 19% on net rental income (after deductible expenses). Non-EU residents pay 24% on gross income, with no expense deductions permitted. Consequently, the tax position for non-EU buyers who intend to generate rental returns warrants specific advice from a Spanish tax practitioner before commitment.
Wealth Tax and the Solidarity Levy
Spain applies a wealth tax on assets held within its jurisdiction by non-residents. Historically, Andalusia exempted its residents from regional wealth tax, and in 2022 the national government introduced a separate Solidarity Levy on net assets above €3 million. This levy applies to both residents and non-residents with Spanish-situated assets above the threshold, and rates range from 1.7% to 3.5% on the excess above each bracket.
For buyers acquiring at the upper end of the Spanish luxury market, this levy is a material structuring consideration. The interaction between the solidarity levy and the regional wealth tax positions of individual buyers is not straightforward, and the question of whether to acquire in personal name, through a Spanish holding company, or via an international structure depends on the buyer’s overall tax residency and asset profile. Early advice from a Spanish tax adviser is not optional for acquisitions above €3 million.
Capital Gains at Exit
Non-resident sellers in Spain pay capital gains tax on the profit from any disposal. EU and EEA residents pay at a flat rate of 19% on the gain, calculated as the difference between the acquisition price (including all documented costs) and the sale price. Non-EU residents historically paid 24%, though Spain has progressively harmonised rates for treaty-partner nationals.
A retention mechanism applies at the point of sale. The buyer is legally required to withhold 3% of the purchase price and pay this directly to the Spanish tax authority on the seller’s behalf. This acts as an advance payment against the seller’s eventual capital gains liability, with any surplus refundable on application. For buyers, the practical consequence is that an additional 3% of the agreed price needs to be budgeted and remitted at completion.
There is no capital gains tax exemption for length of ownership in Spain, unlike the system that applied historically. However, careful documentation of all acquisition costs, improvement expenditures, and associated professional fees at the time of purchase significantly reduces the taxable base at exit.
Total Acquisition Cost Summary for Andalusia
As a working reference, buyers in Andalusia should plan for the following total additional costs on top of the agreed purchase price:
For resale properties: ITP at 7%, plus notary fees (approximately 0.5%), land registry fees (approximately 0.4%), and legal representation (approximately 1%). Total acquisition costs fall in the range of 9% to 10%.
For new-build properties: VAT at 10%, AJD at 1.2%, plus notary, registry, and legal costs. Total acquisition costs typically fall between 12% and 13%.
These figures are consistent with the broader picture described in the premium positioning of the Spanish market for international buyers. The tax burden, while material, compares favourably with equivalent jurisdictions such as the United Kingdom, where stamp duty land tax alone can reach 17% for non-resident buyers acquiring investment property above £1.5 million.
Where to Focus in 2026
The Costa del Sol remains the primary concentration of international capital in Spain’s residential market. Buyers focused on Marbella apartments, Benalmadena, or any of the coastal municipalities benefit from Andalusia’s reformed 7% ITP rate. Buyers comparing Andalusia with other Spanish regions should factor in the variance in both ITP and AJD rates when modelling total acquisition economics.
For any acquisition, the minimum professional team required comprises a local Spanish lawyer, a tax adviser with non-resident expertise, and a registered notary. The question of how to structure the acquisition, whether in personal name or through a corporate vehicle, deserves specific analysis before contracts are signed. More on the process is covered in the guide to buying property in Spain safely.
Barok Estates International advises international buyers at the acquisition stage, working alongside legal and tax professionals to ensure that the financial structure of each transaction is considered before commitment. For confidential guidance on a specific acquisition, contact the advisory team directly.
Explore the full Barok Estates International property portfolio or read more about the Estepona versus Marbella comparison to identify which Costa del Sol location best fits your acquisition strategy.
