When buying property, investing or running a business in Spain, you must consider Spanish income tax and tax residence rules. You will be liable to pay taxes to the Spanish tax authorities on any property you own and any other assets or investments you have in the country.
If you do not pay the appropriate tax to the Spanish authorities, your property may build up a debt against it, on which interest is also due. This will make selling it difficult, and your bank account could be embargoed.
The amount of tax you are liable to pay is determined by whether you are classed as a resident or non-resident, so it is essential to establish your tax residence in Spain.
Capital Gains Tax
You will need to pay capital gains tax on any properties, investments or other assets located in Spain. The tax rate is applied on a sliding scale based on the amount of profit made, from 19% to 30%.
Wealth Tax
Wealth tax is measured on the assets you own worldwide rather than your income and includes property, savings, investments, art, jewellery, furniture, cars and boats, etc.
The Spanish wealth tax will only affect you if you have assets in Spain worth over €700,000 per person. The rate you pay will depend on the area in which your assets are located and can range from between 0.2% to 3.5%.
Residents in Spain can also get an additional allowance of up to €300,000, which can be offset against the value of their primary home (not including properties owned through corporate structures – see our pages on Buying Spanish property through a company).
Spanish income tax and non-residence rules must be considered carefully when buying property or investing in Spain.
The figures above are indicative of the tax payable during a Spanish property purchase. The actual costs will depend on your particular circumstances and the region in which you want to purchase, so please contact us for an accurate estimate.
There are free Spanish Non-Resident Tax Calculators online, but please be wary about relying on them to calculate the tax you think you need to pay. There are many complex variables regarding your tax residency status, the type of income you receive, the type of property you own, etc., so the results from these calculators can be inaccurate. The fact that you used an online calculator will not help you if Spanish tax officials issue you a fine for an inaccurate tax declaration.
For peace of mind and to avoid any nasty surprises, it is always worth getting professional advice on your Spanish residency status and the taxes due. Tax and legal professionals may also be able to suggest tax mitigation steps that can help you legitimately reduce your tax bill.
The Beckham Rule is a special Spanish tax regime for expatriates. It allows qualifying individuals to pay a flat tax rate on employment income and to be treated as non-residents for certain other tax purposes.
Any individual who moves to Spain for professional reasons and has not been tax resident in Spain during the five previous tax years may apply. This includes employees, remote workers, directors, and certain entrepreneurs.
Qualifying income is taxed at a flat rate of 24% up to €600,000. Income exceeding that threshold is taxed at 47%.
You must not have been considered a tax resident in Spain during the five tax years immediately preceding your relocation.
Your move to Spain must be for genuine employment or professional reasons, such as:
Holding an employment contract with a Spanish or foreign companyWorking remotely from Spain under a Digital Nomad Visa
Acting as a highly qualified professional or entrepreneur conducting a business activity in Spain
Serving as a director of a company, provided that—if the company is asset-holding—you hold no more than 25% of its shares
You must apply for the regime within six months of registering with the Spanish Social Security system (Seguridad Social). This deadline is strictly enforced.
The regime applies for a total of six tax years: the year you become a Spanish tax resident and the following five full years.
The regime applies for a total of six tax years: the year you become a Spanish tax resident and the following five full years.
Under the Beckham Rule, all employment and professional income is taxable in Spain, regardless of where it is earned. However, income from non-Spanish sources—such as interest, dividends, investment income, and capital gains—is not subject to Spanish tax.
You are only subject to Wealth Tax and Solidarity Tax on assets located in Spain. Foreign assets are excluded from the Spanish tax base during the six-year period.
Your spouse and dependent children under 25 (or of any age if legally disabled) may also benefit from the regime, provided they meet the requirements and file separate applications.
If you move to Spain to act as a director, you may apply regardless of your shareholding. However, if the company is an asset-holding entity, your ownership must not exceed 25%.
If you cease to be tax resident in Spain before completing the six-year period, you will automatically lose the benefits of the regime. From that point onward, you will be taxed under the general Spanish tax system, which includes progressive rates and worldwide income taxation.
Del Canto Chambers has a specialised team ready and eager to support you to apply for Spanish nationality. If you are interested in applying and would like to know if you are eligible, we would be delighted to help you.
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