Buying & Living in Spain in 2026 – Property Taxes & Visas

In January 2025, comments made by Spain’s Prime Minister, Pedro Sánchez, sparked concern among international buyers about possible changes to how non-EU, non-resident property purchases might be taxed. The headlines were widely misunderstood: there has been no change to Spain’s property taxes so far, and any future changes would require formal legislation.

Introduction

Since Spain ended its Golden Visa programme on 3 April 2025, and following Spain’s Prime Minister Pedro Sánchez’s comments on 13 January 2025 about the possibility of increasing property taxes for foreigners, there is some confusion about the possibility of buying property in Spain. This blog outlines the situation and the status of internationals interested in purchasing property in Spain in 2026.

Tax Residency and Non-Residency in Spain

The first question when it comes to living or paying taxes in Spain is whether one is classified as a Spanish tax resident. Residency is required where an individual spends more than 183 days in Spain within a given tax year or where their primary economic interests are centred in the country.

Most overseas buyers, however, are categorised as non-residents. For them, taxation applies solely to Spanish-source income, primarily rental revenue and capital gains.

Can Non-Europeans Buy Property in Spain?

Yes, foreigners, including non-European internationals, can buy property in Spain: all you need is a NIE identity card, a Spanish bank account and a tax representative if you don’t live here. The growing popularity of this charming sunny country, especially in southern parts such as Marbella and Costa del Sol, means that investing in property continues to be a good option for internationals searching for a second home in a beautiful and culturally inspiring location, either as a primary residence, holiday home or rental investment.

What Is the 100% Property Tax Controversy?

In January 2025, Spain’s Prime Minister Pedro Sánchez commented that non-European buyers could face “100% property tax”. While what the Prime Minister meant was that he was considering the option of non-European buyers paying double the regular property tax, the comment was misinterpreted to mean that some might have to pay 100% of the property price as a tax, thereby doubling the cost of buying property for non-Europeans including UK citizens, understandably causing concern among potential investors from Britain and other parts of the world.

However, the reality is quite different:

• The January 2025 comments were political signalling, and a related draft bill was later submitted to Parliament in May 2025.
• The proposal discussed in legal and industry updates is generally described as a complementary state tax that could increase the effective cost of transfer tax (ITP) for non-EU, non-resident buyers purchasing resale property.
• Importantly, this is still a proposal: it has not become law, and any change would require parliamentary approval and an effective date.

Even if a new tax were introduced, it would only apply to new purchases, not to existing property owners or people finalising a property purchase before any future tax changes come into force.

Since many political groups have already opposed the idea, and given that Sánchez’s government does not hold an absolute majority, the likelihood of such a tax being implemented in its extreme form is low.

There will be no immediate impact on foreign property buyers in Spain, and the Spanish property market remains a fully accessible and attractive market for international investors.

Will a 100% Property Tax Be Implemented in Spain?

At present, there is no new “100% tax” in force for foreign buyers. The measures discussed publicly since January 2025 have been linked to a draft proposal that would require parliamentary approval before it could apply to any purchases. As with any tax proposal, the final scope, exemptions and implementation timetable (if any) can change during the legislative process.

• The proposal would need to pass through both the Spanish Congress and Senate, which could take six months to over a year before being approved, if at all.
• The Spanish government does not have a majority in Congress, making it challenging to pass extreme measures without significant political negotiations.

Even if tax changes are introduced in the future, they would likely be less extreme than the headlines suggest and only apply to new purchases made after any new law comes into effect.

This serves as a reminder that it’s wise to buy sooner before any potential tax changes occur.

How Much Does It Cost to Buy a Property in Spain?

Although the taxes and fees you must pay when purchasing a property in Spain vary depending on the property and region, as a general guide, total costs and fees sum up to around 10–12% of the purchase price. This is true for all property purchases in Spain, irrespective of whether you are buying with a mortgage (hipoteca) or a cash buyer.

If you purchase with a mortgage, you would need to front an additional 30–40% of the purchase price as a deposit and bank fees, depending on particular bank conditions, noting that most banks charge a fee of around 1% of the mortgage value and prefer a 30% deposit. Most banks will fund up to 80% for the first property, and 70% for subsequent properties, though there are a few that will finance rural or rustic land. You can read more details in our Marbella property buyers’ guide.

Taxes for Foreign Property Owners in Spain

While Spain remains open to foreign buyers, it is helpful to understand the breakdown of the property taxes that apply when purchasing and owning Spanish real estate.

1. Taxes When Buying a Property

• Resale properties: When purchasing a second-hand property in Spain, buyers pay a transfer tax (ITP) of 6–10%, depending on the region. This is 7% when purchasing a property in Andalucía.
• New-build properties: For new properties purchased off-plan, buyers pay a 10% VAT (IVA) plus a 1.5% Stamp Duty (AJD) in most of Spain.

To complete the purchase on the day of exchange, you need to go to the Notary. Notary fees can vary between 0.1% and 2% of the purchase price, plus another €400–700 to the land registry after the sale, and legal costs are usually around 1%. These costs are all included in the 10–12% guide for the total cost of purchasing a property in Spain mentioned above.

2. Annual Taxes for Non-Resident Owners

• Non-Resident Income Tax (IRNR) or Imputed Income Tax (if not renting out): Non-residents not renting their property will be required to pay annual non-resident tax known as Impuesto sobre la Renta de no Residentes, which is a small tax based on the property’s cadastral value that needs to be reported by Modelo 210 by the end of each year.
• If renting out the property: If you choose to rent your property, EU/EEA citizens pay a 19% tax on rental income, while non-EU citizens (including Brits and Americans) pay a 24% tax on rental income.
• Local Property Tax (IBI): For all properties, you must pay an annual tax of 0.4–1.1% of the property’s rateable value, which varies depending on the particular property and location.

3. Capital Gains and Inheritance Tax

There are specific taxes that occur when selling or inheriting property, including:

• Capital Gains Tax (Plusvalía): When selling a property that is not your primary residence, you will be required to pay Capital Gains tax on the change in price of the property from when you bought and sold it. Capital gains tax varies between 19–27%, depending on the region, citizenship of the non-resident and increase in value of the property.
• Inheritance Tax: If you inherit a property you will be required to pay an inheritance tax, that varies by region, and your relationship with the deceased.

4. Rental Income Tax

If you rent out your property in Spain, you are required to pay taxes on your rental income and pay Non-Resident Income Tax (IRNR).

• For EU/EEA residents, the tax rate is 19% on net rental income after allowable deductions, while non-EU residents are taxed at 24% on net income.
• Deductible expenses may include mortgage interest, property taxes, community fees, insurance, maintenance, and professional management costs, provided they are directly related to the maintenance and management rental activity (not renovations or improvements) and adequately documented.
• Following a Spanish National High Court ruling dated 28 July 2025, non-EU non-resident landlords may also be able to deduct qualifying rental expenses under IRNR, subject to the specific filing position and supporting documentation.

Consult our Guide on Taxes in Spain for more details about taxes to consider if you own assets spend more than 90 days in Spain.

Residency Visa Options for Foreign Property Buyers

To buy a property in Spain, foreigners must have a NIE (número de identificación del extranjero) and a Spanish bank account. The NIE must be obtained in Spain, can take time, and must be issued prior to signing the deed or finalising the purchase, so potential buyers are advised to start organising the process with their lawyers as early as possible. By law, all property owners who are not residents in Spain must also appoint a tax representative.

Can European Citizens Live in Spain?

Yes, European residents from within the Schengen area, including France, Germany and Italy, can live and work in Spain without any problem. They just need to apply for residency to obtain their ‘green card’ or ‘NIE’ residency.

Does Owning a Property in Spain Mean You Can Live in Spain?

No. For foreigners buying property in Spain, the issue is not whether they can buy property, rather how much time they can spend in Spain as non-residents, so the real question is what visas they are entitled to apply for.

What Visas Allow Non-Europeans to Live in Spain?

Non-Europeans need to apply for relevant visas to visit and reside in Spain.

Now that the Spanish Golden Visa has ended, non-EU buyers must consider alternative residency options. You can see a full list of Spanish Visas here, however it is always wise to consult the Spanish embassy in your country or your lawyer for assistance. Once you have lived in Spain legally for five years, you can usually apply for Long-Term Residence Visa. Below we provide an overview of some of the visa options available to non-European nationals.

1. Work-Related Visas

These visas allow non-EU nationals to live and work in Spain under various conditions. The Employee Visa is for those with a formal employment contract with a Spanish company, the Self-Employment Visa is for freelancers or individuals starting their own business in Spain, and the Telework Visa or Digital Nomad Visa is for remote workers employed by foreign companies who want to reside in Spain while working online.

Other work-related visas include the Highly Qualified Worker Visa – for professionals in specialised fields with high-demand skills; Intra-Company Transfer Visa, for employees transferred to a Spanish branch of their employer; Artist/Staff/Reporter Visa – for professionals in cultural, artistic, or media-related fields; and Working Holiday Visa, available for young people from certain countries, allowing limited work during an extended stay.

2. Residence Visas (Non-Work Related)

Residence Visas are for those planning to reside in Spain without engaging in professional work. One of the most popular is the Non-Lucrative Residence Visa, sometimes known as the Retirement Visa, which is suitable for retirees and individuals with sufficient passive income or savings that they do not need to work. Another popular option is the EU Long-Term Residence Recovery Visa, which is for individuals who previously held EU long-term residency status and wish to recover it.

3. Business and Entrepreneur Visas

For non-Europeans planning to invest, start a business, or engage in entrepreneurial activity in Spain there are visas such as the Entrepreneur Visa.

4. Study and Research Visas

There are also various visa options for non-EU citizens pursuing academic, research, or training opportunities. These include: the Study Visa, for students enrolled in recognised educational programs; the Auxiliar de Conversación Visa, for language assistants working in Spanish schools; the Researcher Visa, for individuals conducting scientific or academic research; and the Internship Visa, for students or graduates completing internships in Spain.

5. Family Reunification Visas

Family reunification visas are intended for the reunification of family members of residents or EU citizens legally residing in Spain.

Why 2026 Is a Good Time to Buy Property in Spain

Despite the political discourse about tax uncertainty and the ending of the Golden Visa, Spain remains an excellent location for foreign property investment. In particular:

• No immediate tax changes are expected: The “100% tax” proposal was misunderstood, is not law and faces strong opposition.
• Consistently strong property market: Demand for property remains high in Spain, with prices rising around 10% each year in premium locations like Marbella, Benahavís and Estepona.
• Excellent lifestyle and investment potential: Spain continues to offer attractive weather, natural beauty, culture and amenities, fantastic real estate opportunities and a high standard of living.
• Spanish residents enjoy easy and free access to travel in the Schengen zone.
• Incredible range of development projects in Marbella and surrounds offer luxury new homes at off-plan prices.

Conclusion

While the “100% tax proposal” has made headlines, it is not yet law, and foreign buyers remain welcome in Spain. The country continues to be a stable and attractive destination for property buyers worldwide, with a full range of visa and residency options available for expats, whether for investment, lifestyle, or retirement.

For expert guidance on buying property in the Marbella area, please contact MPDunne today.