Tax keys when buying a second home in Spain

Spain remains one of the most attractive Mediterranean destinations for buying a second home. Climate, quality of life and security draw thousands of foreign buyers every year. However, behind the dream of buying a house by the sea there is a tax reality worth knowing before signing, because the associated taxes and costs can add between 10% and 15% on top of the price of the property.

Taxes at the time of purchase

Taxation depends on whether the home is new or second-hand:

1. Second-hand home: the Property Transfer Tax (ITP) is paid, a regional tax whose rate varies by region (usually between 6% and 10%). In the Valencian Community the general rate is 10%.
2. New home: VAT applies (10% on housing) plus the Stamp Duty (AJD), which ranges roughly between 1% and 1.5% depending on the autonomous region.

Costs associated with the transaction

In addition to taxes, the purchase involves a series of costs that must be budgeted from the start: notary, registration at the Land Registry, agency fees and, if financed with a mortgage, the cost of the valuation. Having independent advice from the outset avoids surprises at the moment of signing.

The NIE and the bank account: essential preliminary steps

No foreign buyer can sign the deed without a Foreigner Identity Number (NIE). We recommend arranging it in advance, together with opening a bank account in Spain, so as not to block the transaction schedule.

Recurring taxes after the purchase

Being an owner in Spain generates annual obligations that continue as long as you keep the property:

• IBI: the Property Tax, a municipal and annual tax calculated on the cadastral value.
• Imputed income (IRNR): if you are a non-resident and the home is not rented out, the tax authorities consider that you obtain income from having it available and you must declare it through Form 210.
• Waste collection charge and community fees, depending on the municipality and the property regime.

Plan before you buy

Good tax planning before the purchase makes it possible to anticipate the real total cost of the transaction, choose the best form of ownership and avoid future problems with the Tax Agency. At Eurofiscal we support the whole process —from the NIE to the annual return— integrating the tax, legal and documentary side into a single point of contact who speaks your language.