Taxes if you own a house in Spain

For Sale in Marbella

Taxes on a (second) house in Spain

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Your Dutch speaking estate agent on the Costa del Sol will be happy to explain it to you.

Income tax residents

(Impuesto sobre la renta de las personas físicas, IRPF)
Every foreigner resident in Spain must make tax declarations in relation to his personal obligations and about the worldwide income. If you stay more than 6 months per year in Spain, you will be considered as tax resident even if you have not yet applied for a residency permit. In Spain the income tax is progressive, going from 24 to 43%. As a Spanish resident you can deduct up to a certain amount mortgage costs (interest and redemption) from your taxable income.

( People Without Spanish Residence Permit )
The Spanish taxman taxes foreign house owners with a kind of 'rental value forfait'. Over 2% of the cadastral value one owes 24% tax. If you rent out the house, you must pay 24% tax on the rental income. Over the period that the house was not rented, you pay proportionally the rental value forfait.

Transfer tax( Impuesto de TransmisionesPatrimoniales )

If you buy from a private individual, you will have to pay transfer tax on the officially registered amount.

The general rate is now (since the end of the year) 1.5%. The general rate is currently (since 1 July 2010) 8%. However, depending on the state in which the purchase is made, the rate can deviate downwards or it can even be decided to buy with VAT (for purchases and sales between business parties)

Turnover tax(IVA)

If you buy land from a property developer, you pay 18% IVA. If you buy from a private person, you pay 8%. If you buy a newly built house from a property developer (house & land) then you only pay 8% IVA over the whole thing. If you buy the land first, then you pay 18% IVA even if you let a project developer/contractor build a house on it later. You then pay 8% IVA over the new build.

If you have a garage built at the same time as the new build, you also pay 8% IVA on that. If you have a swimming pool or garage built on top of an existing house, you pay 18% IVA.

For stand-alone alterations (which are not included in the calculation) you pay 8% IVA. Stand-alone conversions (which do not amount to more than 25% of the cadastral value) are subject to an 18% IVA. You only pay 8% on larger renovations.
Construction tax(ImpuestosobreConstrucciones,instalaciones y obras)
For the application of a building permit approximately 2.5% tax is charged on the declared value of your future home (this value is indicated by the architect). The percentage depends on the municipality. Often the architect has already calculated the percentage in his offer and will pay that tax for you.

TIP
If you do not live permanently in Spain it is a good idea to pay all your financial and fiscal obligations (electricity, telephone bills, municipal taxes and levies) via an automatic bank authorisation. You will not be the first to find all kinds of disconnections and reminders on arrival at the house in Spain. Make sure you have sufficient funds in your account!