Tax Guide to Buying Property in Spain as a Foreigner in 2026
Buying a property in Spain as a foreigner is a safe, well-regulated process, but it comes with paperwork and taxes worth understanding before you sign anything. Here’s what to expect on the way to completion.
Before you buy: essential paperwork
- NIE (foreigner ID number): required for any property, tax or banking transaction in Spain.
- A Spanish bank account: needed to pay taxes, utilities and, if applicable, your mortgage.
- Tax residency status: whether you’re a resident or non-resident for tax purposes determines which taxes apply to you.
Taxes on purchase
The main tax depends on whether the property is new build or resale:
- New build: VAT (10% on residential property) plus Stamp Duty (AJD), which varies by region.
- Resale: Property Transfer Tax (ITP), also set regionally.
In the Valencian Community, where SAGA operates, these rates follow their own regional rules, so it’s worth confirming the exact percentage in force at the time of purchase with a local advisor.
Ongoing taxes after purchase
- IBI (property tax): annual, charged by the town hall.
- Non-Resident Income Tax (IRNR): applies if you’re not a Spanish tax resident, even if you don’t rent the property out.
- Wealth Tax: based on the total value of your assets in Spain, with thresholds that vary by region.
When you sell: capital gains and municipal plusvalía
When it’s time to sell, you’ll need to calculate the municipal plusvalía (the increase in the land’s value) and, if you’re a non-resident, a 3% withholding on the sale price on account of your income tax, adjusted afterwards against the actual gain.
Why a full advisory review matters
Every purchase has its own quirks: prior inheritances, financing from abroad, double taxation depending on your home country, or the difference between resident and non-resident status. A personalised review before you sign avoids mistakes that are expensive to fix later.
Need personalised guidance for your situation?
For more than 60 years, SAGA has guided investors and private buyers through property decisions on the Costa Blanca. Get in touch with our team and we’ll help you work through the tax, legal or financial questions before you take the next step.
