A €3 million villa in Marbella does not attract a different transfer tax because its purchaser lives in London, Geneva or Dubai. Foreign buyer taxes in Spain are principally determined by the property, the transaction structure and the owner’s tax residence – not by nationality. Yet for an overseas buyer, knowing which taxes arise, when they are payable and who carries the liability is central to buying with confidence.
For a luxury residence on the Costa del Sol, taxes should be considered from the first discussion of budget. They affect not only the funds required at completion, but also the annual cost of holding a second home and the eventual proceeds on sale. The figures below provide a clear planning framework, although personal advice from an independent Spanish tax adviser remains essential before committing to a purchase.
Foreign buyer taxes in Spain at purchase
The first question is whether the home is a resale or a new-build property. This distinction shapes the principal tax cost.
Resale homes: Transfer Tax
A resale property in Andalusia is generally subject to Impuesto sobre Transmisiones Patrimoniales, or ITP. The current general rate is 7% of the taxable value. In practice, this is usually the higher of the declared purchase price and the property’s official reference value, where one exists.
For buyers accustomed to markets where transaction tax is modest, this is often the largest single cost beyond the price itself. On a €2 million resale villa, 7% equates to €140,000. A carefully prepared purchase budget avoids the unwelcome impression that these costs are an afterthought.
The official reference value deserves particular attention. It may not reflect the finer points that give a Marbella home its value – a private position in Sierra Blanca, exceptional sea views, bespoke interiors or a rare beachfront setting. Even so, it can set a tax floor. Where there is no reference value, the contractual price and any valuation scrutiny become more relevant.
New-build homes: VAT and stamp duty
A newly built residential property bought from a developer is normally subject to VAT, known in Spain as IVA, at 10%. In Andalusia, buyers also pay stamp duty, AJD, generally at 1.2% for residential new-build transactions.
That means a €2 million new villa may carry €224,000 in IVA and AJD before professional fees. The treatment can differ for plots, commercial premises, parking spaces sold separately and certain company transactions, where VAT at 21% may apply. This is one reason a buyer should establish the legal status of a property early, rather than relying on a brochure’s description of it as “new”.
The costs that sit alongside tax
Notary and Land Registry fees are statutory and usually modest relative to the purchase price, though they should still be budgeted for. Legal fees, valuation costs and, where relevant, mortgage arrangement costs are separate from tax. As a broad planning allowance, overseas buyers often reserve around 10% to 13% above the agreed price for a resale purchase, with the precise amount depending on price, structure and professional services.
A Spanish mortgage can add another layer of detail. Since legislative reforms, lenders generally bear certain mortgage deed costs, but buyers remain responsible for their own due diligence, valuation and agreed banking charges. The purchase deed and mortgage deed should be reviewed as connected, but distinct, transactions.
Annual taxes for non-resident owners
Owning a Spanish home brings annual obligations, whether it is used every holiday season or remains closed for much of the year. These charges are not punitive foreign buyer taxes in Spain, but they matter to the true cost of ownership.
Local Property Tax and municipal charges
IBI, or Impuesto sobre Bienes Inmuebles, is the annual municipal property tax. It is based on the cadastral value rather than market value, and the rate varies by municipality. Marbella, Benahavís and Estepona each apply their own local rules and billing arrangements.
Owners may also receive charges for rubbish collection and, in some developments, community fees. For a premium gated community, community fees can be substantial where they support 24-hour security, landscaped grounds, spa facilities or private access. They are not taxes, but they are a meaningful part of holding a well-managed residence.
Non-resident income tax on personal use
A non-resident who owns a Spanish property for private use may need to file non-resident income tax, even where the home produces no rental income. This is calculated on an imputed income basis, usually 1.1% or 2% of the cadastral value, rather than on the property’s purchase price.
The applicable tax rate depends on where the owner is resident. Residents of EU and EEA countries generally benefit from a 19% rate, while the standard rate for many other non-residents is 24%. The return is typically filed annually. It is a modest charge for many owners, but failing to address it can create unnecessary complications during a future sale.
If the property is rented, the tax position changes. Rental income must be declared, and allowable expense deductions depend on the owner’s country of residence and the applicable rules. Short-term holiday lettings also require particular care in Andalusia, where registration, property standards and local restrictions can affect whether and how a home may be marketed.
Wealth tax, the solidarity tax and high-value homes
For buyers of exceptional residences, Spain’s wealth-related taxes require bespoke advice. Spain has a national Wealth Tax regime, with regional variations, and Andalusia has historically offered significant relief. However, the national Temporary Solidarity Tax on Large Fortunes can apply to net wealth above €3 million and has changed the practical outcome for some high-net-worth individuals.
The result depends on worldwide assets, debts, ownership proportions, marital arrangements, tax residence and the value allocated to the Spanish property. A buyer who is non-resident is generally assessed on Spanish assets, while a Spanish tax resident may be exposed to a wider worldwide basis. Ownership through a company, trust or other structure does not automatically remove exposure and may introduce additional reporting or tax considerations.
This is not an area for assumptions based on a neighbour’s experience. A well-considered ownership structure should be agreed before contracts are exchanged, particularly where a property will be shared by family members or held as part of a wider estate plan.
Taxes when you sell a Spanish property
The buyer’s tax bill is only half the picture. Planning for sale from the outset protects both liquidity and records.
A non-resident seller is normally subject to Spanish capital gains tax on the gain made from the property. The buyer is legally required to retain 3% of the agreed sale price and pay it to the Spanish tax authorities as an advance payment towards the seller’s liability. It is not an extra cost for the buyer, but it must be managed correctly at completion.
The seller may later claim a refund if the withheld amount exceeds the final capital gains tax due. Conversely, further tax may be payable if it does not cover the liability. Keeping the original purchase deed, invoices for qualifying improvements, taxes paid on acquisition and selling expenses is therefore prudent from day one.
The seller also usually pays the municipal capital gains tax, known as plusvalía municipal. This relates to the increase in the value of the land during ownership and is calculated by the local authority. Its outcome varies materially according to the cadastral land value and period of ownership.
A disciplined approach before signing
Before reserving a Marbella property, confirm whether it is a resale or new-build, obtain its cadastral and reference-value information, and ask for a written estimate of all taxes and completion costs. Non-residents will also need an NIE number, a Spanish tax identification number, before completing the purchase.
For a high-value acquisition, align the property lawyer, tax adviser and wealth planner before the private purchase contract is signed. This is particularly valuable where there are cross-border inheritance considerations, rental intentions or multiple purchasers. The right preparation brings privacy, clarity and a calmer completion process.
At Amrein Properties, we believe a home of this calibre deserves more than an attractive address. It deserves discreet guidance that respects the financial detail behind the lifestyle – so that your time in Marbella can begin with the confidence of a decision made well.