Understanding the tax implications and residency routes for non-resident foreign buyers on the Costa del Sol helps you budget accurately and avoid costly surprises after completion.
Buying a home on the Costa del Sol is a rewarding decision, but for non-resident purchasers the financial picture extends well beyond the headline price. Getting to grips with the foreign buyers tax implications early in your search ensures your budget is realistic and your purchase proceeds smoothly. This guide explains the main taxes you will encounter, your ongoing obligations as an owner, and how property ownership now relates to residency in Spain.
Taxes when you buy
The taxes payable on completion depend chiefly on whether you are buying a resale property or a brand-new home from a developer.
Resale properties: Transfer Tax (ITP)
Most purchases on the Costa del Sol involve resale homes. In Andalucía, the Impuesto sobre Transmisiones Patrimoniales (ITP), or property transfer tax, is 7% of the declared purchase price. This is the single largest tax cost for most buyers and is paid shortly after signing the deed of sale at the notary.
New-build properties: VAT and Stamp Duty
If you buy a newly built home directly from a developer, ITP does not apply. Instead you pay VAT (IVA) plus Stamp Duty (AJD). These are separate levies, so the calculation differs from a resale purchase. Because rates and thresholds can change, confirm the current figures with your lawyer before committing.
Additional purchase costs
Whatever you buy, set aside a buffer beyond the tax itself for:
- Notary fees
- Land Registry fees
- Legal and conveyancing fees
- Bank and currency-exchange charges where relevant
A prudent rule of thumb is to budget around 10–12% of the purchase price for taxes and associated costs combined, though your lawyer can give you a precise estimate for your specific property.
Taxes while you own
Owning a Spanish property as a non-resident brings annual obligations that are easy to overlook but important to stay on top of.
Non-Resident Income Tax
Even if you do not rent your home out, Spain levies an imputed income tax on non-resident owners. The tax authorities calculate a notional income based on the property's cadastral value and tax it accordingly. If you do let the property, you are taxed on the actual rental income instead, with EU and EEA residents generally able to deduct certain expenses.
IBI (local property tax)
IBI is the annual municipal property tax, comparable to council tax in the UK. The amount depends on the cadastral value and the rate set by the local town hall. Rates vary between municipalities along the coast.
Community and utility charges
Many sought-after homes — for example in established communities around Nueva Andalucía or San Pedro de Alcántara — sit within gated developments with shared facilities. Community fees fund pools, gardens and security, and should be factored into your running costs alongside utilities and home insurance.
Wealth tax
Spain operates a wealth tax that can apply to high-value assets held by non-residents, including property situated in Spain. Allowances and rates vary, and the position can be complex where larger portfolios are involved. Specialist tax advice is essential if your Spanish assets are substantial.
Taxes when you sell
Planning your exit is part of buying wisely. Two charges matter most when a non-resident sells.
Capital Gains Tax
Non-residents pay capital gains tax on the profit made between purchase and sale. To secure the revenue, the buyer is required to withhold a percentage of the sale price and pay it directly to the tax authorities on the seller's behalf. If the withholding exceeds your actual liability, you can reclaim the difference.
Plusvalía municipal
This local tax is charged on the increase in the value of the land (not the building) since you acquired it. It is paid to the town hall and the amount depends on the location and the length of ownership.
The end of the Golden Visa
This is the single most important change for international buyers to understand. Spain abolished its real-estate Golden Visa in April 2025. Purchasing property in Spain no longer grants residency rights of any kind. Any source suggesting you can "buy your way" to a Spanish residence permit through property is out of date — treat such claims with caution.
This does not make Spain off-limits; it simply means residency and property are now separate matters that you plan independently.
Residency options after the Golden Visa
If you wish to spend extended periods in Spain or relocate, several routes remain. The right one depends on your nationality, your income and your circumstances.
Visiting as a non-resident
Many owners are perfectly happy as non-residents, enjoying their home within the limits that apply to short stays. Non-EU nationals, including British citizens, are generally subject to the 90-days-in-any-180 rule for visa-free stays in the Schengen Area. You can own and use a Costa del Sol property comfortably within these limits without becoming a resident.
The non-lucrative visa
For those wanting to live in Spain without working locally, the non-lucrative visa is a long-standing route for financially independent individuals and retirees who can demonstrate sufficient passive income and private health cover.
Remote working routes
Spain also offers a visa aimed at remote workers and digital professionals employed by companies outside Spain. Eligibility criteria, income thresholds and documentation requirements apply, so professional immigration advice is recommended.
EU and EEA citizens
Citizens of EU and EEA countries continue to enjoy freedom of movement and can register as residents in Spain through a simpler administrative process, subject to the usual requirements around resources and healthcare.
Because immigration rules evolve and depend heavily on personal circumstances, always verify the latest requirements with a qualified immigration lawyer before making plans.
Practical steps for a smooth purchase
A little preparation goes a long way:
- Obtain an NIE. The Número de Identificación de Extranjero is your Spanish tax identification number and is required to buy property, pay taxes and open utility accounts.
- Appoint an independent lawyer. Choose one who acts solely for you, not for the seller or developer, and who can confirm current tax rates and any local nuances.
- Budget for the full cost. Add taxes, fees and a contingency to the asking price so there are no surprises at completion.
- Plan your tax residency. Spending more than 183 days in Spain in a calendar year can make you a Spanish tax resident, with wider implications for your worldwide income.
- Consider currency. If your funds are in another currency, exchange-rate movements can materially affect your costs.
When you are ready to start viewing, you can explore the full range of Costa del Sol property for sale across the coast's most desirable areas, from the marina lifestyle of Puerto Banús to the elegant townscape of Marbella. Whether you intend to live here, holiday regularly or let the property between visits, understanding the tax framework first puts you in the strongest possible position to buy with confidence.
A note on professional advice
This article is a general overview, not personal tax or legal advice. Tax rates, allowances and immigration rules can change, and the right approach depends on your individual situation and nationality. Engage an independent Spanish lawyer and, where relevant, a cross-border tax adviser before committing to a purchase.
