Taxes when buying a property in Spain if you are a foreigner or non-resident
Buying a property in Spain involves assuming a series of taxes and expenses that it is advisable to know well before signing any contract. If you are a foreigner or non-resident, there are also some fiscal particularities that affect your transaction. We explain them all to you.Taxes when buying: Property Transfer Tax (ITP) or VAT?
The main tax you pay as a buyer depends on the type of property:| Type of Property | Tax | Rate |
|---|---|---|
| Second-hand property (between individuals) | Property Transfer Tax (ITP) | From 6% to 11% depending on the Autonomous Community |
| New property from a developer | VAT | 10% (4% in social housing) |
| New property from a developer | Stamp Duty on Documented Legal Acts (AJD) | 0.5% – 2% depending on the Autonomous Community |
The 3% withholding: what it is and when it applies
This is the most important particularity for foreign buyers. If the seller is a non-resident in Spain (whether foreign or Spanish living abroad), the buyer is required to withhold 3% of the purchase price and pay it to the Tax Agency. This mechanism, known as withholding for Income Tax for Non-Residents (IRNR), serves to ensure that the seller pays the tax on the capital gain obtained. If you do not make this withholding, you may be held subsidiarily liable for the seller's debt. The procedure is:- Withhold the 3% at the time of the notarial signing.
- Pay that amount to the Tax Authority using the form 211 within one month.
- Provide the seller with the payment receipt (form 213).