Taxes when buying and selling property in Spain: A guide for UK buyers
- Redline Company
For many UK buyers, purchasing property in Spain feels familiar—until the tax bill arrives. From transfer tax and VAT to capital gains and non-resident income tax, Spain’s property tax system works very differently to the UK, and post-Brexit changes have only added complexity. Understanding these taxes before you commit can mean the difference between a smooth transaction and an expensive surprise.
That’s why having specialist guidance from PCC Legal, who coordinate the legal and tax process for UK buyers, can make all the difference. As specialists in Spanish real estate law and Costa del Sol conveyancing, we ensure your transaction is legally sound, tax-efficient and fully compliant at every stage.
Table of Contents
What You Will Learn in This Article
Our Spanish property experts provide a clear overview of the main taxes and legal considerations involved in buying, owning and selling property in Spain, especially for UK buyers.
- The key taxes payable when buying property in Spain, including transfer tax and VAT.
- Taxes that apply when selling property, such as capital gains tax.
- How property ownership in Spain affects ongoing annual taxes.
- Recent changes impacting UK buyers post-Brexit.
- Why expert legal guidance from PCC Legal is essential to navigate these tax complexities.
What taxes do UK buyers pay when buying property in Spain?
When it comes to local and ongoing property taxes in Spain, guidance from experienced Spanish property lawyers can help you stay compliant and avoid unexpected costs. From the municipal plusvalía tax to annual charges like IBI, non-resident income tax, and potential wealth tax, understanding these obligations is key to managing your property investment with confidence.
Property Transfer Tax (ITP) for resale homes
For second-hand properties, the main tax is the Impuesto de Transmisiones Patrimoniales (ITP), charged by the regional government. Rates typically range from 6% to 10%, varying by region. For example, in Andalusia, the rate is commonly around 8%.
VAT and Stamp Duty for new builds
Newly built homes attract a 10% VAT (IVA) instead of ITP, plus approximately 1.5% stamp duty (Actos Jurídicos Documentados, AJD). These taxes are payable to the seller and amount to about 11.5% of the purchase price.
Additional purchase costs
- Notary fees: €600–€1,500 depending on price and deed complexity.
- Land registry fees: Typically, €400–€800 to legally register ownership.
- Legal fees: Budget 1–2% of the property price for conveyancing services.
- Survey and translation costs may also apply.
What taxes apply when selling a Spanish property as a UK non-resident?
Before selling your Spanish property, it’s essential to understand the taxes that apply to your profit and ongoing ownership, and this is where experienced Spanish property and conveyancing lawyers can help you navigate capital gains, Plusvalía, and annual tax obligations with clarity and confidence.
Capital Gains Tax (CGT): When you sell your property, capital gains tax applies to the profit made. Non-residents currently pay 19% tax on gains, and UK residents post-Brexit are subject to this rate as non-EU nationals.
Plusvalía Tax: This is a municipal tax based on the increase in land value since purchase. Rates and calculation methods vary but expect this cost in addition to CGT.
Ongoing property taxes UK owners often overlook in Spain
- IBI: Local property tax based on the cadastral value.
- Non-Resident Income Tax: If the property is rented or deemed rented (even if not occupied), non-resident owners pay tax—UK buyers pay 24% post-Brexit on gross rental income or deemed income.
- Wealth Tax: Applied if total assets exceed certain thresholds, varying by region.
Important considerations for UK buyers post-Brexit
UK nationals are now classified as non-EU residents, which affects tax rates and obligations in Spain. For example, the proposed 100% property tax on purchases by non-resident non-EU nationals would significantly increase costs. While proposals have been discussed regarding higher taxes for non-EU buyers, no such measures are currently in force. However, this uncertainty highlights why early tax planning is increasingly important for UK buyers.
Why use PCC Legal property lawyers for your Spanish property taxes?
PCC Legal’s experienced real estate lawyers provide UK buyers with bilingual, expert advice tailored to the latest legal and tax landscape. Our team helps with:
- Clarify your full tax liability upfront.
- Ensure compliance with regional variations.
- Navigate complex post-Brexit changes.
- Avoid costly surprises or penalties through thorough due diligence.
Frequently Asked Questions (FAQ)
What is the typical tax rate on buying a home in Spain?
UK buyers typically pay between 6% and 10% in transfer tax on resale properties, or 10% VAT plus around 1.5% stamp duty on new builds, depending on the region. When buying its crucial to have the support of a Spanish property lawyer or conveyancing specialist.
Are there taxes when selling my Spanish property?
Yes. PCC Legal’s qualified Spanish real estate lawyers, will advise you on capital gains tax on your profit, as well as the local Plusvalía tax charged by the municipality.
How does Brexit affect UK buyers’ property taxes?
UK buyers are now classed as non-EU residents, which can mean higher tax rates and additional obligations. An experienced Spanish conveyancing lawyer can guide you through the latest post-Brexit rules and compliance requirements.
Do I pay tax if I don’t rent out my property?
Yes. Even if the property is not rented, non-resident owners must pay deemed rental income tax. A Spanish property lawyer can help ensure this is correctly calculated and declared.
For clear, comprehensive guidance on Spanish property taxes, trust PCC Legal—your Costa del Sol conveyancing experts. Contact PCC Legal today for up-to-date advice tailored to UK buyers and expats navigating Spain’s evolving property laws.
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