Taxes on a home in Spain: ITP, IBI, IRNR and Box 3

With a house in Spain, you deal with two tax systems: the Spanish and the Dutch. Some taxes are paid once upon purchase, while others are paid annually for as long as you own the property. In this article, we list the four most important ones: ITP, IBI, IRNR and Box 3. This way, you know exactly what to expect beforehand and won't face any surprises.

ITP: a one-off tax on purchase

If you buy an existing home, you pay a one-off transfer tax: the Impuesto sobre Transmisiones Patrimoniales (ITP). In the Comunitat Valenciana, which includes the Costa Blanca, this has been 9 percent of the purchase price since June 1, 2026. Above €1 million, it is 11 percent (Agència Tributària Valenciana, 2026). If you buy a new build from a property developer, you do not pay ITP, but 10 percent VAT (IVA) and 1.4 percent stamp duty (AJD). Do you want to know what you pay in total on top of the purchase price? Then read What does it cost to buy a house in Spain?

IBI: the annual municipal tax

The Impuesto sobre Bienes Inmuebles (IBI) is the Spanish property tax. You pay it annually to the municipality where your home is located. The basis is the cadastral value (valor catastral), which is usually significantly lower than the market value. Each municipality sets its own rate, within the legal limits of 0.4 to 1.1 percent for homes (BOE, Ley Reguladora de las Haciendas Locales, art. 72).

A calculation example: with a cadastral value of €100,000 and a rate of 0.6 percent, you pay €600 per year. The cadastral value, which you need for the IRNR, is also listed on the IBI assessment notice. Tip: request the latest assessment from the seller before the purchase, and make sure the IBI is automatically debited from your Spanish account thereafter.

IRNR: non-resident income tax

If you live in the Netherlands and own a property in Spain, you are a non-resident in Spain. You then pay the Impuesto sobre la Renta de No Residentes (IRNR). The amount depends on what you do with the property.

Do you use the property yourself or is it vacant? In that case, the Spanish tax authorities attribute a notional income to you: 1.1 percent of the cadastral value, or 2 percent if that value was revised longer ago. As an EU resident, you pay 19 percent on this (Agencia Tributaria). With a cadastral value of €100,000, that amounts to €209 or €380 per year. For 2026 and later, you file this return (modelo 210) between April 1 and December 31 of the following year (Agencia Tributaria).

Do you rent out the property? Then, for the rental periods, you pay tax on your actual rental income. As an EU resident, this is also 19 percent, and you may deduct costs associated with the rental, such as maintenance, IBI and the community fees. For the weeks that you do not rent out the property, you pay the notional tax mentioned above. You declare rental income annually; for income from October 2026 onwards, you do so from April 1 to 20 of the following year.

Box 3: your Spanish property in your Dutch tax return

You also declare your Spanish property in the Netherlands. A second home falls under Box 3, savings and investments. You declare the market value on January 1; a mortgage on the property counts as debt. For 2026, the Dutch Tax and Customs Administration applies a notional return of 6 percent on other assets, such as real estate. You pay 36 percent tax on this. The tax-free allowance is €59,357 per person (SRA, 2026).

Because Spain also taxes the property, the tax treaty between the Netherlands and Spain prevents you from paying tax on the same thing twice. You receive a reduction to prevent double taxation in your tax return. Please note: since 2023, the tax-free allowance is distributed proportionally between your Dutch and foreign assets. As a result, that reduction is lower than before (Grant Thornton). The Box 3 system will be revised in the coming years, so check the current rules every year.

All taxes in one overview

Do you live in Belgium? Then different rules apply to your tax return. You can read more about this in our article for Belgian buyers.

Buy well-prepared

Taxes are no reason not to buy in Spain, but they are a reason to factor them in beforehand. Include the annual IBI, IRNR and Box 3 in your budget, alongside the community fees. Have your tax returns handled by a gestor in Spain and a tax advisor in the Netherlands who is familiar with both systems. This way, you avoid penalties and pay no more than necessary.

At Palmhouses, we connect you with reliable advisors and provide you with a clear cost overview in advance. No fine print and no ambiguities. Are you already looking around? View apartments on the Costa Blanca or houses in Torrevieja.

Questions about your situation? Schedule a no-obligation video call. We are happy to think things through with you.