People don’t generally move to Spain for tax reasons alone – places like Monaco, Dubai or Albania offer far more attractive rates. But many are drawn by the lifestyle, affordable property, and lower cost of living.
So how much will the taxman take – whether you own a holiday home or become a tax resident in Spain (which happens if you spend more than 183 days there in a calendar year)?
That depends on several factors, including which of Spain’s 17 autonomous regions you live in. Taxpayers in Spain are affected by two annual government budgets: the state budget and the regional one.
It's also a constantly shifting landscape as Spanish politicians both regionally and nationally seem to make changes every year right now (or talk about doing so) so it’s key to seek expert advice when planning a purchase or move.
So, what taxes might you pay in Spain?
Property Purchase Taxes
At the time of writing, no changes have been implemented by the Spanish government, despite proposed increases in taxes for non-EU buyers. Currently, everyone pays the same rates.
You should expect to pay 10-14% of the purchase price of a second-hand property. This includes transfer tax, or ITP - a regional tax set by each autonomous community which typically ranges between 6% and 10%.
On new-build properties, buyers pay VAT (IVA) at a rate of 10% of the purchase price and stamp duty (AJD) at a rate of 1.2% to 1.5% of the purchase price.
Tax on Holiday Rental Income
If you rent out your Spanish holiday home and are not resident in Spain, you’ll need to pay tax on the income. The rate differs, depending on whether you are resident and are EU/non-EU.
EU nationals pay a flat rate of 19% on rental income after deductions. These deductions – which significantly reduce taxable income – include insurance, IBI tax, community fees, mortgage interest, and repairs, based on the number of rental days.
Non-EU nationals will pay a flat rate of 24% on gross rental income, with no deductions permitted.
If you are resident in Spain, the income will be taxed as general tax base (as mentioned below), to which you would apply the corresponding deductions (expenses) listed above.
Income Tax
A Spanish tax resident pays tax on worldwide income, while a non-resident only pays tax on Spanish-sourced income.
Income in Spain is divided into general income and savings income, each subject to different progressive rates, which are the same across the country.
Savings income consists of interest and dividend income, capital gains made on the sale or transfer of assets, income derived from life assurance contract and pensions annuity income.
2025 Savings Income Rates:
|
INCOME |
TAX RATE |
|
Up to €6,000 |
19% |
|
€6,000 to €50,000 |
21% |
|
€50,000 to €200,000 |
23% |
|
€200,000 to €300,000 |
27% |
|
€300,000 onwards |
30% |
Personal Income Tax (General)
All other income (including rental and pension income) is classified as general income and the scale rates applied are made up of state tax rates and regional tax rates, so that there are variations over the regions – whilst these are up to date at the time of writing, check for any adjustments.
|
Region |
Starting from |
For income over €300,000 |
|
Andalucía |
19% for income up to €12,450 |
47% |
|
Balearics |
18.5% for income up to €10,000 |
49.25% |
|
Canaries |
18.5% for income up to €12,450 |
50.5% |
|
Cataluña |
19% for income up to €12,450 |
50% |
|
Madrid |
18% for income up to €12,450 |
45% |
|
Murcia |
19% for income up to €12,450 |
47% |
|
Valenciana |
18.5% for income up to €12,000 |
54% |
Beckham Law Tax Exemption
Beckham Law or Ley Beckham is a special tax regime in Spain designed to attract skilled professionals, entrepreneurs and investors from abroad.
If you are eligible – and this includes digital nomads - income tax on Spanish-sourced earnings is paid at a special flat rate of 24% (on a maximum of €600,000 in annual earnings).
This is instead of paying the progressive tax rates mentioned above that can go up to 54% - plus it exempts you from paying Wealth Tax (see below).
To be eligible, you must have residency status (through a residency visa), not having been tax resident in Spain for 10 years before relocating to the country, and be able to show proof of employment or investment activity.
Wealth and Solidarity Taxes
Spain applies two taxes on wealthy: wealth tax and solidarity tax – but you don’t pay both as any wealth tax paid is deducted from the solidarity tax liability. Solidarity tax only applies to those with net wealth above €3m, and because there are individual and main-home deductions, in reality this is €4m (or €8m for married couples).
Wealth tax applies if you owe tax after deductions or if their assets exceed €2m. Progressive rates range from 0.2% up to 3.5% and each person gets €700,000 allowance plus another €300,000 for the main home if they are resident.
Note that different regions offer different allowances – check with your advisor. Madrid currently applies a 100% relief of the wealth tax due, which effectively means zero wealth tax for residents of the region.
Capital Gains Tax
Capital gains are calculated as the difference between the transfer price of an asset and its acquisition price. Capital gains are taxed at a rate progressive rate from 19% to 28% depending on the level of income. You may also be subject to capital gains tax in the UK.
Succession Tax
Recent reforms to succession (inheritance) tax have significantly improved the inheritance tax situation for spouses and children of expats in many popular regions. Andalucía, Balearic Islands, Canary Islands, Madrid, Murcia and Valenciana have all virtually eliminated inheritance tax for spouses and children – but seek specialist advice on your own situation.
For more practical advice on purchasing property, taxes, and life in Spain, take a look at our comprehensive Buying Guide to Spain – or explore property for sale in Spain now and take the first step towards your new home.
