Paying Taxes

Demystifying Property Taxes in Andalucía, Spain: A Guide for Property Purchasers

This guide covers the taxes you pay when you buy a property in Andalucía and the taxes you pay each year as an owner.

Taxes When Buying a Property:

• Transfer Tax (ITP or IVA): This tax is payable upon property purchase. The rate depends on whether you’re buying a resale property (ITP) or a new build (IVA).
• Resale Property (ITP): The general ITP rate in Andalucía is 7% (article 41 of Andalusian Law 5/2021), charged on the higher of the price and the property's Catastro reference value (article 10.2 of the ITP law). Some homes bought as a habitual residence pay a reduced rate (see Exemptions and Reductions below).
• New Build Property (IVA): For new build properties, Value Added Tax (IVA) of 10% is applied to the purchase price (article 91 of the IVA law). Stamp Duty (AJD) of 1.2% also applies to the deed (article 49 of Andalusian Law 5/2021), with reduced rates for some homes bought as a habitual residence (article 50).

Additional Purchase Costs:

In addition to the transfer tax, several other taxes and fees can factor into the overall cost of purchasing property in Andalucía:

• Municipal Plusvalía (IIVTNU): A local tax on the rise in the value of the land since the last transfer. In a sale it is paid by the seller, not the buyer (article 106 of the Local Finance Act), so it is not normally a purchase cost. The amount depends on how long the seller owned the property and on the municipality.
• Notary Fees: Notary fees cover the legal services of a notary public who officially authenticates the purchase deed. Fees are typically based on the property value.
• Land Registry Fees: Fees are associated with registering the property in your name at the Land Registry. These fees are also calculated based on the property value.
• Lawyer Fees (Optional): While not mandatory, employing a lawyer can provide valuable guidance throughout the purchase process. Fees will vary depending on the lawyer’s experience and the complexity of the transaction.

The Two Main Ongoing Taxes:

• Impuesto sobre Bienes Inmuebles (IBI): Often referred to as the property tax, IBI is an annual levy based on the cadastral value of your property. This value is set by the Catastro and cannot exceed the property's market value (article 23.2 of the Catastro Act). Each municipality sets its own IBI rate for homes, between 0.4% and 1.10% of the cadastral value, or up to 1.30% in some municipalities (article 72 of the Local Finance Act).
• Impuesto sobre el Patrimonio (Wealth Tax): Residents of Spain pay this tax on their worldwide net assets, and non-residents only on their assets in Spain (article 5 of the Wealth Tax Law). Andalucía applies a 100% rebate to the tax bill (article 25 bis of Andalusian Law 5/2021), so residents of Andalucía pay none, and non-residents whose most valuable Spanish assets are in Andalucía can apply the same rebate (additional provision 4 of the Wealth Tax Law).

Understanding Your IBI Bill:

• Breakdown: Your IBI bill will typically outline the cadastral value of your property, the applicable IBI rate for your municipality, and the total amount payable.

• Property Type: Residential properties generally have lower rates compared to commercial ones.
• Value: The IBI rate is the same for every home in a municipality, so a higher cadastral value means a higher bill. The exception is a home left empty for more than two years without good reason by an owner of four or more homes: councils can add a surcharge of up to 50% of the bill, rising to 100% after three years and by up to 50 points more when the owner has two or more empty homes in the same municipality (article 72.4 of the Local Finance Act). Municipal Rates: Each municipality sets its own IBI rates within the national limits.

Wealth Tax - Are You Liable?

While IBI applies to most property owners, wealth tax might not. Here’s why:

• Allowances: Each person has their own €700,000 allowance (article 28 of the Wealth Tax Law), and a resident's main home is exempt up to €300,000 (article 4.Nueve). A return can still be due when your assets are worth more than €2 million, even if nothing is payable (article 37).
• Rates: The state scale runs from 0.2% to 3.5% (article 30 of the Wealth Tax Law), and Andalucía sets its own scale (article 25 of Andalusian Law 5/2021) before the 100% rebate. The state solidarity tax on large fortunes still applies to net wealth above €3 million (article 3 of Law 38/2022).

Exemptions and Reductions:

While you’ll likely encounter the taxes mentioned above, there are some exemptions and reductions to consider:

• Transfer Tax (ITP): Andalucía offers reduced rates rather than exemptions: 6% for a habitual residence worth up to €150,000, and 3.5% for buyers under 35 (same limit), buyers with a disability and large families (up to €250,000), among others (article 43 of Andalusian Law 5/2021).
• Municipal Plusvalía: Transfers between spouses into the marital estate or on divorce are not taxed (article 104.3 of the Local Finance Act), and councils can give close family who inherit a rebate of up to 95% (article 108.4).
• IBI: Councils can give large families a rebate of up to 90% (article 74.4 of the Local Finance Act), and other rebates depend on each council's tax bylaws. Ask your town hall what applies to you.

Proactive Steps for Property Purchasers:

• Estimate Your IBI: While awaiting your first IBI bill, you can estimate your potential tax burden. Most municipal websites provide information on local tax rates. The cadastral value is protected data (article 51 of the Catastro Act), so before you buy, ask the seller for the latest IBI bill, which shows it.
• Budget for Property Taxes: Factor in annual property taxes, including both IBI and any potential wealth tax liability, when planning your budget to avoid financial surprises.
• Seek Professional Advice: Consulting a qualified tax advisor familiar with Spanish regulations is highly recommended. They can provide personalized guidance based on your specific circumstances, including potential deductions or tax implications of future property sales.

Resources for Andalucian Property Taxes:

• Municipal Websites: Most Andalusian municipalities have websites with information on local tax rates, payment methods, and potential exemptions. Junta de Andalucía Website

Spanish Tax Agency: The Spanish Tax Agency (Agencia Tributaria) https://www.agenciatributaria.gob.es/ 

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Disclaimer

The information contained in this guide is provided by PropertyList and is intended for general informational purposes only. It does not constitute professional legal or financial advice. While PropertyList has endeavoured to ensure the accuracy of the information provided, laws and regulations are subject to change.

Recommendations:

Consult a Tax Professional: For personalized advice on your specific circumstances, it is highly recommended to consult with a qualified tax advisor familiar with Spanish tax laws. They can provide tailored guidance on potential tax implications and any applicable exemptions or reductions.

Verify Information: Always confirm details and current rates with the relevant authorities, such as the Spanish Tax Agency (Agencia Tributaria) or your local municipality. Municipal websites often contain information on local taxes like IBI rates and potential exemptions.

Seek Legal Counsel: For complex transactions or any legal uncertainties, consulting with a lawyer specializing in Spanish property law is advisable.

PropertyList, its employees, and all affiliated entities will not be held liable for any errors or omissions in the information contained in this guide and for any consequences arising from its use.

Sources

Last reviewed: 25-09-26. Checked against the consolidated texts on the BOE: the ITP law (Real Decreto Legislativo 1/1993), article 10; Andalusian Law 5/2021, articles 25, 25 bis, 41, 43, 49 and 50; the IVA law (Law 37/1992), article 91; the Local Finance Act (Real Decreto Legislativo 2/2004), articles 72, 74, 104, 106 and 108; the Catastro Act (Real Decreto Legislativo 1/2004), articles 23 and 51; the Wealth Tax Law (Law 19/1991), articles 4, 5, 28, 30 and 37 and additional provision 4; and Law 38/2022, article 3.