If you're buying a home on the Costa del Sol, or you already own one, property tax in Spain reaches you at three separate moments, each with its own forms and deadlines. Since Brexit, UK residents are taxed as non-EU owners, and the 2025 headlines about a "100% tax" on non-EU buyers have left many people unsure what applies today.
Getting it wrong is expensive, because the purchase tax alone on a resale home in Andalucía is 7% of the price, and an unfiled annual return builds up surcharges year after year.
In Andalucía, a UK buyer pays 7% transfer tax on a resale home, or 10% VAT plus 1.2% stamp duty on a new build. While you own the property you pay the council's annual IBI and non-resident income tax at 24%, and when you sell you pay 19% on any gain plus the council's plusvalía. The proposed 100% tax on non-EU buyers has not become law.
In this guide, you'll learn which taxes apply when you buy, while you own and when you sell, the current Andalucía rates, when the Modelo 210 return is due, how wealth tax works here and where the 100% tax proposal stands as of October 2026.
Taxes when you buy
Purchase tax is set regionally, so the rates here are those of Andalucía, the region that covers the whole Costa del Sol, and which tax you pay depends on whether the seller is a private owner or a developer.
A resale home pays the Impuesto sobre Transmisiones Patrimoniales (ITP), Spain's property transfer tax. Andalucía has charged a single general rate of 7% since Ley 5/2021 de Tributos Cedidos, the regional law on ceded taxes, whatever the price. Reduced rates exist, but they're tied to the buyer's main residence, so a holiday home bought by someone living in the UK doesn't qualify. In September 2026 the Junta de Andalucía announced a cut in the general rate from 7% to 6.75% from 2027, and until that change is approved and in force, 7% is the figure to budget for.
The tax is charged on the declared price or on the valor de referencia (reference value) published by the Catastro, Spain's property register for tax purposes, whichever is higher. That rule has applied since Ley 11/2021.
A new build bought directly from the developer pays IVA (VAT) instead of ITP. The Agencia Tributaria, Spain's tax agency, applies the reduced 10% rate to homes, including up to two garage spaces sold with them. The deed also pays Actos Jurídicos Documentados (AJD), a stamp duty charged at 1.2% in Andalucía.
Notary, Land Registry and legal fees come on top of these taxes. You'll also need a Número de Identidad de Extranjero (NIE), the foreigner identification number, before you sign (see my guide on how to get an NIE number), and the full process is in my guide to buying property in Marbella.
Property tax in Spain while you own the home
Once the home is yours, two taxes come round every year, the council's IBI and the state's non-resident income tax, and the second is due even if the property never earns anything.
IBI, the annual council tax
The Impuesto sobre Bienes Inmuebles (IBI) is worked out by applying the council's rate to the property's valor catastral, or cadastral value. Each town hall sets its own rate within limits fixed by national law. You'll find the cadastral value on your IBI receipt or on the Sede Electrónica del Catastro, the Catastro's online portal.
The council charges the whole year to whoever owns the property on 1 January. If a home changes hands partway through the year, buyer and seller can agree in the contract how that year's IBI is split.
Non-resident income tax
The Impuesto sobre la Renta de No Residentes (IRNR), Spain's non-resident income tax, has been charged at 24% on UK residents since Brexit, against 19% for residents of the EU, Iceland, Norway and Liechtenstein, according to the Agencia Tributaria. What that rate applies to depends on whether you let the home.
If you keep the property for your own use, Spain taxes a deemed income of 1.1% of the cadastral value in municipalities whose values have been revised in a general valuation, or 2% elsewhere. You can't deduct any expenses, and the amount is reduced by days if you owned the home for only part of the year. As a worked example, every 100,000 euros of cadastral value at the 1.1% rate gives a deemed income of 1,100 euros, and 24% of that is 264 euros of tax.
If you let the property, the tax falls on the rent instead. UK residents pay on the gross amount, because only EU and EEA residents can deduct expenses. Co-owners are separate taxpayers, and each one declares their own share.
When Modelo 210 is due
The non-resident return is Modelo 210, and the Agencia Tributaria has changed the Modelo 210 deadlines for income from 2026 onwards.
| Type of income | 2025 income | 2026 income onwards |
|---|---|---|
| Deemed income on a home you don't let | During 2026, by 31 December 2026 | 1 April to 31 December of the following year |
| Rental income, annual return with tax to pay | 1 to 20 January 2026 | 1 to 20 April of the following year |
If you own an unlet home and haven't filed for 2025 yet, the deadline is 31 December 2026. Rental income accrued up to September 2026 can still be declared quarterly, in the first 20 days of April, July, October and January, and for rent from October 2026 onwards the window becomes 1 to 20 April of the following year. A Spanish tax adviser (asesor fiscal) can file it for you each year.
Wealth tax in Andalucía
Andalucía gives a 100% relief (bonificación) on the Impuesto sobre el Patrimonio, Spain's wealth tax, under article 25 bis of Ley 5/2021. The Agencia Tributaria confirms that all non-residents can apply the rules of the region where most of their Spanish assets are located, so a UK owner whose Spanish assets are mainly in Andalucía can use the relief. A return is still required if your Spanish assets are worth more than 2 million euros.
Large estates should also look at the Impuesto Temporal de Solidaridad de las Grandes Fortunas, a state solidarity tax on large fortunes created by Ley 38/2022. It charges 1.7% to 3.5% on a taxable base above 3 million euros, and any wealth tax already paid can be deducted from it. It was introduced for two years and has been extended until Spain reforms its regional financing system.
Is the 100% tax on non-EU buyers in force?
As of October 2026 it is still a proposal. No tax on non-EU buyers has been approved by the Cortes Generales, the Spanish Parliament, or published in the Boletín Oficial del Estado (BOE), Spain's official gazette, so a UK buyer completing a purchase today pays the same ITP or VAT as anyone else.
The government announced the idea in January 2025. The Socialist parliamentary group then tabled a bill to promote affordable rental housing (Proposición de Ley para impulsar el alquiler de viviendas a precios asequibles), file 122/000196, which was published in the Congress bulletin on 30 May 2025. Article 4 of the bill would create a new state tax on property bought by people who aren't resident in the EU, at 100% of the property's value, minus any ITP or AJD already paid.
On 27 March 2026, Reuters reported that the measure had not been debated in Congress and lacked support from the smaller parties the government relies on, although a government source said it would keep pushing for a debate. The bill's test is where the buyer lives rather than their nationality, so a British national resident in Spain or elsewhere in the EU would fall outside it as drafted. Any bill can change on its way through Parliament, so check the status again close to your completion date.
Taxes when you sell
Selling has its own set of rules, which I cover in detail in my guide to capital gains tax on Spanish property. In short, non-residents, UK residents included, pay 19% on the gain, which is broadly the sale price minus what the home cost you, including the taxes and costs paid when you bought it. The buyer has to withhold 3% of the price and pay it to the Agencia Tributaria within a month of the sale, and the seller then files Modelo 210 and can reclaim any excess.
The council also charges the plusvalía municipal, a tax on the rise in value of the land, at a rate each town hall sets up to a legal maximum of 30%, and nothing is due if the sale shows no gain. The seller normally pays it, but when the seller is a non-resident individual the law makes the buyer pay it on the seller's behalf, so the amount is usually agreed as part of the sale. For everything else a sale involves, see what selling a Costa del Sol property involves.
Do UK residents pay tax on Spanish property in the UK too?
In many cases you do. If you live in the UK, rent from a Spanish property counts as foreign income and goes on your Self Assessment return, and you can usually offset the Spanish tax already paid through Foreign Tax Credit Relief under the double taxation agreement between the UK and Spain. For a gain on a property abroad, GOV.UK says you pay tax in both countries and claim relief in the UK.
Tax rules in both countries change often, so confirm what applies to you with a Spanish tax adviser (asesor fiscal) or lawyer (abogado), and with a UK tax adviser, before you buy or sell.
Planning the numbers before you make an offer
Property tax in Spain is much easier to live with when it goes into your budget before you make an offer. Purchase tax comes with the purchase, IBI and Modelo 210 come round every year, and the tax on a future sale depends on the costs you can prove from the day you bought, so keep every deed and invoice.
I'm a private, independent adviser in Marbella, Nueva Andalucía, Estepona, Benahavís and Sotogrande, and I analyse every property before I recommend it, including the taxes it will carry. You can read how I help buyers on the Costa del Sol, ask for an independent property check on a home you've already found, or get in touch to talk through your search.