Most Hungarian buyers know there is a 7% transfer tax when buying in Andalusia. Fewer realise that, as a non-resident owner, Spain expects an annual tax return even if you never let the property, or that when you sell, the buyer holds back part of the price against your tax bill.
This article walks through the taxes that come with owning Spanish property, on the assumption that you continue to live in Hungary and remain tax resident there. If you move to Spain, the picture changes considerably; we touch on that at the end.
Overview: what, when, how much
| Tax | When it arises | Rate (2026) |
|---|---|---|
| IBI (local property tax) | every year | cadastral value × municipal rate |
| Non-resident income tax (IRNR), imputed income | every year, if not let | 19% of 1.1% or 2% of cadastral value |
| IRNR on rental income | if you let | 19% of net income (EU residents) |
| Wealth tax | yearly, on larger estates | 100% relief in Andalusia |
| Solidarity tax on large fortunes | Spanish net assets above €3m | national tax |
| Capital gains tax | on sale | 19% of the gain |
| Plusvalía municipal | on sale | municipal tax, borne by the seller |
IBI: the local property tax
IBI (Impuesto sobre Bienes Inmuebles) is the annual property tax paid to the town hall. It is based on the cadastral value (valor catastral), which is usually well below market value, at a rate set by the municipality within the legal band of 0.4% to 1.1% for urban property. Whoever owns the property on 1 January pays for the year; on a mid-year purchase, the contract usually splits it pro rata.
Most towns also levy a separate rubbish collection charge (basura). Pay both by direct debit from your Spanish account, because late payment brings surcharges.
Non-resident income tax, even if you never let
This is the most common surprise. On a non-resident's property that is used privately or left empty, Spain taxes an imputed income (imputación de rentas):
- 1.1% of the cadastral value if that value has been revised in the last ten years, otherwise 2%;
- tax at 19% of that figure if you live in the EU or EEA (24% for residents of other countries);
- pro rata if you owned the property for only part of the year;
- filed on form 210 by 31 December of the following year;
- filed separately by each owner.
Example: say a flat in Estepona has a revised cadastral value of €160,000 (an assumption). Imputed income is 1.1%, or €1,760. Tax is 19% of that, €334.40 a year. If a married couple owns it half each, that is €167.20 per person, on two separate returns.
Tax on imputed income usually comes to a few hundred euros. Failing to file, however, brings surcharges and penalties, and your lawyer will check it when you sell. It is worth handing to a local tax agent (gestor).
Alone, jointly or through a company?
Ownership structure affects several taxes. With joint ownership, each owner files on their own share, and the €700,000 wealth tax allowance applies per person. It also matters for inheritance who owns what share. Buying through a company (Hungarian or Spanish) rarely pays off for a holiday home you use yourself: other taxes and accounting duties follow, and Spanish rules can impose a specific charge on property held by certain foreign entities. Decide this before you buy, because changing it later can trigger tax again.
If you let: tax on rental income
If you let the property, you are taxed on the rent actually received instead of on imputed income. As an EU resident:
- you can deduct costs linked to the letting: IBI, community fees, insurance, repairs and maintenance, utilities, management and platform fees, mortgage interest, and depreciation on the building (commonly around 3% a year);
- costs are deductible in proportion to the days actually let;
- tax is 19% of the net income;
- for days the property was not let but used by you, imputed income still applies.
Since 2024, rental income has been declared once a year, early in the following year; the exact filing window is set by ministerial order and changes from the 2026 tax year. In practice, your gestor handles this.
Wealth tax and the solidarity tax
Spain has a wealth tax, and as a non-resident you would be liable on your Spanish assets. Two things mean most buyers are not affected:
- a €700,000 tax-free allowance per person on net Spanish assets (after debt);
- Andalusia has granted 100% relief on wealth tax since 2023, and non-residents can apply it to their Andalusian assets.
Separate from that is the national solidarity tax on large fortunes (Impuesto Temporal de Solidaridad de las Grandes Fortunas), which applies to net wealth above €3 million and which the regions cannot waive. Returns for 2025 were due in July 2026. It does not touch the typical holiday-home owner, but larger villa portfolios need to plan for it.
On sale: capital gains and plusvalía
When you sell your Spanish property as a non-resident:
- 19% of the gain is Spanish capital gains tax (sale price minus selling costs, less purchase price plus buying costs);
- the buyer withholds 3% of the price and pays it to the tax authority on account of your tax; if your actual tax is lower, you can reclaim the difference;
- plusvalía municipal is a municipal tax on the increase in land value, paid by the seller; since 2021 it is not due if there was no real gain.
Example (assumed figures): you bought for €420,000 with €36,500 of buying costs. Years later you sell for €520,000, with €31,460 of selling costs. The gain is €32,040 and the tax at 19% is €6,087.60. The buyer withheld €15,600 (3%), so €9,512.40 can be reclaimed.
What about Hungary?
Hungary and Spain have a double taxation treaty, signed in Madrid in 1984. For Spanish property, the essentials are:
- income from immovable property (letting) and gains on its sale may be taxed in Spain;
- Hungary exempts that income from Hungarian tax (the exemption method), and may only take it into account when setting the rate.
In practice, you don't pay Hungarian personal income tax a second time on Spanish rent or sale gains. Foreign income that is exempt in Hungary generally still has to be shown on your Hungarian return, though, and details such as social contribution tax need individual review. Always check with your accountant.
If you move to Spain
If you spend more than 183 days in Spain in a calendar year, or your centre of interests is there, you may become Spanish tax resident. You would then be taxed in Spain on your worldwide income at Spain's progressive rates, and you would need to report foreign assets above €50,000 (form 720). Our article on moving to the coast covers this in more detail.
For inheritance, Andalusia grants 99% relief between close relatives (children, spouse), and EU residents can rely on the regional rules. It is worth thinking about the ownership structure with this in mind at the time of purchase.
| Annual task | Usually handled by |
|---|---|
| IBI and rubbish charge | direct debit from your Spanish account |
| Form 210 (imputed or rental income) | gestor, per owner |
| Hungarian personal income tax return | your Hungarian accountant |
| Guest registration for holiday lets | the operator |
If you would like to see the annual taxes and costs for a specific property before you buy, ask us for a breakdown. Our local partner covers the Spanish side and Dr. Georgina Gősi the Hungarian side. See our consulting page for an overview.
This article is general information and not tax advice. Tax rules can change; for your own situation, always consult Spanish and Hungarian tax professionals.
Frequently asked questions
Do I really pay tax if nobody lives in the flat?
Yes. As a non-resident, you must declare imputed income on a property that is empty or used privately. It is usually a few hundred euros a year.
If I let it, am I taxed in Hungary as well?
Under the 1984 Hungary–Spain treaty, rental income from Spanish property is taxed in Spain and exempted by Hungary. Check your Hungarian reporting obligations with your accountant.
Who withholds the 3% when I sell?
The buyer, at the notary signing. They pay it to the Spanish tax authority on your behalf. You then file your capital gains return and, if your tax is lower, reclaim the difference.
Will Spanish wealth tax affect me?
For Andalusian property, the 100% regional relief and the €700,000 allowance mean most buyers are not affected. The national solidarity tax on net wealth above €3 million is a separate matter.
A second home in Spain?
NIE, lawyer, notary, taxes: in 30 minutes we walk through what lies ahead and what you can already sort out from home.
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Dr. Gősi Georgina is Monvero's legal advisor. She looks after contracts, legal due diligence and the legal side of tax questions. This article is for general information; for advice on your own situation, get in touch.
