Buying a Home in Spain as a Non-Resident: Every Tax, Step by Step

Buying a home in Spain as a non-resident is simpler than it sounds: you don’t need Spanish citizenship or residency, just a NIE (Foreigner Identification Number — the tax ID that Spanish authorities issue to any foreigner with economic or legal ties in the country) and, usually, a Spanish bank account. What’s worth understanding upfront is the full tax picture, because it doesn’t stop at the purchase price: there are taxes when you buy, recurring taxes while you own the property, and further taxes when you eventually sell. This guide walks through each stage under the tax rules in force in 2026.

Buying: ITP, or VAT Plus AJD?

The first tax depends on one simple factor: whether the property is new (bought directly from the developer) or resale. New-build purchases carry VAT (Value Added Tax) at the reduced rate for primary residences, plus AJD (Stamp Duty, a regional tax on the notarial formalization of the deed). Resale properties are taxed differently: instead of VAT, you pay ITP (Property Transfer Tax), also a regional tax, which replaces both VAT and AJD in that case.

The practical difference is twofold. First, ITP and AJD are taxes devolved to Spain’s regional governments, so the exact rate depends on where you buy: the same property is taxed differently in Madrid, Catalonia, Andalusia or the Balearic Islands, so it’s worth checking the current rate before signing. Second, neither tax requires Spanish tax residency: you pay them whether you’re a resident or not, and they’re usually handled by the notary or the professional managing the purchase, with a one-month deadline to settle from the date of signing.

While You Own It: Non-Resident Tax on Deemed Income

This is where many foreign owners are caught off guard: even if you never rent out the property or live in it, simply owning urban property in Spain triggers an annual tax obligation under IRNR (Non-Resident Income Tax). The Spanish tax authority treats a second home as generating “deemed income” — a theoretical return, even though no actual income is received — calculated as a small percentage of the property’s cadastral value (the administrative value assigned by the Land Registry’s cadastre, distinct from market value). That percentage depends on whether the cadastral value has been revised within the last decade.

This deemed income is declared every year using Form 210, the form non-residents use for nearly all their filings with the AEAT (Spain’s tax agency). The applicable rate depends on where you’re from: residents of the EU, Iceland and Norway pay a lower rate than residents of the rest of the world. If the property is actually rented out, the obligation changes: in that case you’re taxed on the real rental income rather than the deemed income, again through Form 210.

Selling: the 3% Withholding (Form 211) and Municipal Capital Gains Tax

When the time comes to sell, two taxes catch almost every foreign seller by surprise. The first is an automatic withholding: the law requires the buyer to withhold 3% of the sale price and pay it directly to the AEAT via Form 211, rather than handing that amount over to you. This withholding acts as an advance payment toward the tax the non-resident seller owes on the gain made from the sale. Afterward, the seller must file their own Form 210 declaring the actual capital gain; if the 3% withheld was more than the tax actually owed, you can claim a refund of the excess, and if it was less, you have to pay the difference.

The second tax on a sale is the municipal capital gains tax (formally, the Tax on the Increase in Value of Urban Land), which is collected not by the AEAT but by the town hall where the property is located. It taxes the increase in the land’s value between purchase and sale, and the town hall itself lets you choose whichever calculation method works out more favorably. One important nuance since this tax was reformed: if you can show the property hasn’t actually gained value over that period, this tax shouldn’t apply at all — a point that matters especially in markets that have seen price declines.

At Zythos Business, we help self-employed professionals and small businesses — many with foreign partners or directors — stay on top of exactly this kind of cross-cutting obligation between the national tax authority and local administrations, so that neither buying nor selling a property turns into an unwelcome tax surprise.