Legal and Taxes in Spain
Understanding the Legal Framework
Buying and owning property in Spain is a well-regulated and transparent process. Spanish law provides strong protection for both residents and non-residents, and every transaction must be formalised before a Notary Public and recorded with the Land Registry (Registro de la Propiedad).
Auckland Estates, together with our Spanish legal partners, ensure each client receives clear, compliant advice at every step from purchase contracts to ongoing ownership.
Purchase Costs and Taxes
When purchasing in Spain, you should allow an additional 10–13% on top of the purchase price to cover taxes, legal, and registration fees. The exact amount depends on whether the property is new or resale.
For resale properties:
- Transfer Tax (ITP): 6–10%, depending on the region.
- Notary and Land Registry Fees: Around 1–2% combined.
- Legal Fees: Usually 1–1.5%.
For new build properties:
- VAT (IVA): 10% of the purchase price.
- Stamp Duty (AJD): Typically 1–1.5%.
- Notary, Registry and Legal Fees: 1–2%.
These costs are paid at completion, and your lawyer will provide an exact breakdown before signing.
Ongoing Ownership Taxes
Owning property in Spain involves a few regular taxes, which are straightforward when managed properly.
IBI (Impuesto sobre Bienes Inmuebles):
The annual property tax paid to the local town hall. Similar to UK council tax, it’s based on the property’s cadastral value (usually much lower than market value).
Non-Resident Income Tax:
Even if you don’t rent your property, non-residents must pay a small annual tax based on the notional rental value of the home. The rate for EU residents is around 19%, and 24% for non-EU residents.
Community Fees:
If you own an apartment or property within a complex, community fees cover maintenance of shared areas such as pools, lifts and gardens. These vary by development.
Wealth Tax:
Applies only to high-value portfolios (generally above €700,000 per individual, excluding mortgages and allowances). Rates vary slightly by region.
Renting and Capital Gains
If you decide to rent out your Spanish property, you are liable for rental income tax:
- EU residents: 19% of net income after allowable expenses.
- Non-EU residents: 24% of gross income (no deductions).
When selling, Capital Gains Tax (CGT) applies to profits made from the sale:
- EU residents: 19%
- Non-EU residents: 24%
A withholding tax of 3% of the sale price is usually retained by the tax authorities at completion to ensure CGT obligations are met.
Your lawyer or accountant can offset allowable improvements, agent fees, and purchase costs to reduce your taxable gain.
Residency and Visas
Spain offers several residency options for international buyers:
Golden Visa Programme:
Available for property purchases over €500,000 (excluding taxes and fees). The visa grants residency rights for the investor and immediate family, renewable every two years and leading to permanent residency after five years.
Non-Lucrative Visa:
For those retiring or living in Spain without working. Applicants must show proof of sufficient income or savings to support themselves.
Digital Nomad Visa:
A newer option for remote workers and entrepreneurs, offering favourable tax terms and flexible residency for up to five years.
Inheritance and Wills
Spanish law allows non-residents to specify in their Spanish Will that their national law (e.g., UK law) applies to their estate.
Having a Spanish Will is highly recommended for anyone owning property in Spain, as it simplifies probate, avoids delays, and reduces costs for your heirs.
Legal Representation
Every buyer should appoint an independent English-speaking Spanish lawyer not one recommended by the seller or developer.
Your lawyer will:
- Verify ownership and debts.
- Check planning permissions and building licences.
- Ensure deposits are held securely or protected by bank guarantees.
- Draft or review contracts and oversee completion at the Notary.
Auckland Estates can recommend reputable lawyers across Valencia, Alicante and Málaga who specialise in assisting international buyers.
Why Legal Guidance Matters
Property law in Spain is highly protective, but local knowledge is essential. From tax planning to ownership structure (personal vs company), early advice helps maximise your investment and avoid unexpected costs.
Auckland Estates and our legal partners work together to ensure every transaction is secure, fully compliant, and optimised for your long-term goals.
Contact Us
For tailored guidance on property taxes, residency options or legal requirements, contact our International Department.