Yearly taxes and costs of owning a Costa Blanca home as a non-resident

Owning a Spanish second home as a non-resident costs roughly 1–2% of its value per year. The two taxes everyone pays are IBI (municipal property tax) and non-resident income tax (IRNR) — and yes, you pay a small IRNR even if you never rent it out. Here’s the honest breakdown of the annual costs, plus what you’ll pay when you eventually sell.

By Noël Picou and the team at Team Picou · RE/MAX Inmomás II, Finestrat. This is general information, not tax advice — we introduce you to bilingual tax advisers.

The two taxes every non-resident owner pays

1. IBI (Impuesto sobre Bienes Inmuebles) — the annual municipal property tax, set by each town hall, typically 0.4–1.1% of the cadastral value (which is usually well below market value). Paid once a year.

2. IRNR (non-resident income tax) — Spain taxes non-residents on their Spanish home:

• If you do NOT rent it: an imputed income of 1.1–2% of the cadastral value, taxed at 19% for EU/EEA residents. On a typical home this is usually a few hundred euros per year.
• If you DO rent it: 19% on the net rental income (EU/EEA residents can deduct expenses such as IBI, community fees, repairs and mortgage interest).

The other yearly running costs

• Community fees (comunidad) — if the property is in a complex with shared pool/gardens/lifts. Ranges widely; a key number to ask before buying.
• Rubbish tax (basura) — a small annual municipal fee.
• Utilities — electricity, water, internet; standing charges apply even when you’re away.
• Home insurance — modest; mortgage lenders require it.

All-in, budget roughly 1–2% of the property value per year. A villa lowers community fees but adds garden/pool maintenance; an apartment in a managed complex does the opposite.

What you pay when you sell

• Capital gains tax: 19% on the profit (sale price minus purchase price and allowable costs) for non-residents.
• 3% retention: the buyer withholds 3% of the sale price and pays it to the tax office on your account — refundable if your actual gain is lower.
• Plusvalía municipal: a town-hall tax on the increase in the land value during your ownership.

Wealth tax — usually not a concern

Spain’s wealth tax only applies above a high threshold (generally ~€700,000 of net Spanish assets per person, with regional variation). Most second-home buyers fall below it. For higher-value purchases, check with a tax adviser.

Practical tips

• Set up direct debits for IBI, basura and utilities so nothing lapses while you’re abroad.
• Keep every invoice (IBI, community, repairs) — they reduce your tax if you rent, and your capital gain when you sell.
• File your annual IRNR (Modelo 210) — a tax adviser handles this for a small yearly fee; we can introduce one.

When you’re ready to buy or sell on the Costa Blanca, we’ll walk you through the real numbers in your language. Browse properties · Sell your home · About us.