Property Related Taxes in Estepona and Spain.

Property taxation in Spain can be complex. This guide introduces the principal taxes and costs related to buying, selling, owning or renting a property in Estepona and Andalucía.

Important: This is general information, updated in August 2026. Tax treatment depends on each person's circumstances and should be confirmed with an independent tax adviser or lawyer before making a decision.

When considering property prices in Estepona, remember that the agreed purchase price is separate from the taxes and transaction costs payable by the buyer.

Types of Property Purchases:

Brand New Properties: Purchased from developers, these attract a 10% VAT and 1.2% stamp duty. VAT is due on the notary signing day.

Resale Properties: In Andalucía, these are generally subject to 7% Transfer Tax (ITP). The buyer must file and pay the tax within the applicable regional deadline after completion. For a detailed explanation, read our ITP Property Tax in Andalucía guide.

When dealing with high-end properties, the difference in the final cost of a brand new property and a resale one of the same price can vary, reaching up to more than 100.000€.

Something you should keep in mind during the search process for your future home or investment

Additional CostsLegal Fees: Typically 1% (+VAT) of the purchase price. While not mandatory, hiring a lawyer is advised for due diligence and after-sale services.

Notary and Registry Fees: These vary according to the transaction, property value and documents required. Your lawyer or notary can provide an estimate for the specific purchase.

Bank account Fees: Charges apply for fund transfers or banker's drafts.

Mortgages: Main cost is property valuation, ranging from 500€ to +2,000€.
Technical Due Diligence: Optional but recommended for secondhand properties to assess installations. Costs vary based on property size and work scope.

Owning a property in Estepona comes with annual taxes and costs. These are determined by factors like the property's purchase price, location, size, and cadastral value.

Taxes for Non-Residents

If you're not a resident in Spain but own property there, you're liable for a non-resident tax. This applies whether you rent out your property or not.

Many overlook this tax, but it's essential to note that the tax authorities will check for its payment when you decide to sell. Delayed payments can accrue interest and additional costs.

Wealth Tax

Wealth Tax is assessed on an individual's net wealth, not simply on the purchase price of one property. The general tax-free allowance is €700,000 per individual, subject to the applicable rules and allowances. Residents are generally assessed on worldwide assets, while non-residents are generally assessed on Spanish assets. The final position depends on the individual's circumstances, debts, allowances and current rules. Read our Wealth Tax in Spain guide and obtain independent tax advice.

Property-Related Taxes and Costs

IBI (Municipal Property Tax)

An annual tax, its amount varies based on the property's cadastral value and its municipality.

Garbage Tax

A minimal annual fee, typically under 400€, for garbage collection.

Community Fees

These aren't taxes but mandatory costs for properties within communities. They generally range from 200€ to 1.000€. Non-payment can lead to severe consequences, including property seizure.

Other fixed costs

Monthly bills for electricity and water have a fixed minimum charge, with additional costs based on consumption.

Understanding property taxes in Estepona is crucial, especially the distinctions between non-resident and fiscal resident taxes. Here's a simplified guide to help you navigate these waters.

Non-Resident vs. Fiscal Resident: The Basics

When you purchase real estate in Estepona, annual taxes apply. Your status - either as a fiscal resident or non-resident - determines the specifics. It's essential to be informed to avoid unexpected tax surprises.

Key Taxes for Non-Fiscal Residents

Spanish Non-Resident Tax

Non-resident owners may be liable to Non-Resident Income Tax whether the property is rented or kept for personal use. For a property not rented, the tax is based on imputed income, generally calculated from 1.1% or 2% of the cadastral value before the applicable tax rate is applied. For rental income, the applicable rules and deductions depend on residence status. The general rate is 24%; the 19% rate applies to residents of the EU, Iceland, Norway and Liechtenstein, subject to the relevant conditions.

Spanish Wealth Tax

Spanish Wealth Tax concerns net wealth rather than the value of one property alone. The general €700,000 allowance is per individual, but the calculation and any additional reporting obligations must be reviewed for the specific taxpayer.

Municipal Property Tax

Determined by the property's cadastral value, this rate can vary by region.

Becoming a Fiscal Resident: How and Why?

You may be considered a Spanish tax resident if you spend more than 183 days in Spain during the calendar year. Residence can also arise where Spain is the main centre or base of your activities or economic interests. Individual circumstances and any applicable double-tax treaty should be reviewed with an adviser.

This status can affect your tax obligations. For instance, Spanish residents pay tax on global income and must declare overseas assets worth over €50,000. The Spanish income tax ranges from 19% to 47% for incomes exceeding 300,000 euros.

Considering selling your Estepona property? It's essential to understand the associated taxes and costs. Let's break it down for you.

Key Costs and Taxes When Selling

Plusvalía (Capital Gain)

This municipal tax concerns the increase in value of urban land during ownership. It is not automatically payable in every sale, and the calculation depends on the property, dates, cadastral land value and the rules applied by the municipality. Your lawyer should confirm the position for the specific transaction.

Income Tax

Tax may be due on the gain from a property sale. For a non-resident individual, the general rate on a taxable gain is 19%; the buyer's 3% retention is a payment on account, not the final tax calculation. Spanish tax residents and companies follow different rules and rates. Allowable acquisition, improvement and sale costs may affect the taxable gain, so the calculation should be prepared by an adviser.

Real Estate Agent Fees

If you engage a real estate firm, like ours, to facilitate your sale, there's a fee involved. This fee, plus 21% VAT, is borne by the seller.

Lawyer Fees

While not mandatory, hiring a lawyer for the sale process is advisable.

Mortgage Cancellation Fees

If your property has a mortgage, you'll bear the costs of its cancellation, including any early termination fees.

3% Sales Price Retention

For non-resident sellers, buyers are legally required to withhold 3% of the purchase price. This is later deposited with the tax office, and sellers can claim it back, minus any outstanding taxes.

Considering renting out your Estepona property? Here's what you need to know.

If you have a property in Estepona that's often vacant, you might be contemplating renting it out. Before you do, it's crucial to understand the associated taxes and costs.

Whether you're considering short-term or long-term rentals, each has its own financial implications.

Key Financial Aspects of Renting Out Your Estepona Property

Income Tax

Your residency status determines the tax rate. Non-residents from the EU/EEA are taxed at 19%, while non-EU/EEA citizens face a 24% rate. Residents, on the other hand, are taxed progressively, ranging from 19% to 46% based on income.

TPO (Taxable Asset Transfer Levy)

Residential leases for a stable and permanent use are exempt from Transfer Tax (ITP). Different treatment may apply to other types of lease or arrangement, so the contract should be checked individually.

Agency Fees

If you engage a real estate agency to manage your rental, you'll incur fees. Most agencies operate on a "no win, no fee" basis.

Renting in Estepona: What tenants should know about taxes.

If you're eyeing a rental property in Estepona, we've got some uplifting news for you!

Understanding Rental Costs in Estepona

Transparent Pricing

The rental price you spot online is typically what you'll pay, though there's always room for negotiation.

Agent Fees

Generally, property owners cover real estate agent fees. However, in instances where a property is in high demand and multiple agents are involved, an agent might request a fee from you.

It's essential to be informed about any such fees upfront, and remember, you have the right to decline.

Legal Representation

While not mandatory, it's wise to engage a lawyer when renting, ensuring all legal aspects are covered.

Transfer Tax on Residential Leases

For a residential lease intended as the tenant's stable and permanent home, the lease is exempt from ITP. This exemption does not automatically apply to every other form of occupancy or rental arrangement.

For any non-standard arrangement, the parties should confirm the tax position with a qualified adviser before signing.

When considering long-term rentals, landlords might request references, such as tax returns, bank statements, or recommendation letters.

Providing strong references can be a game-changer, potentially swaying a landlord in your favor, even if another tenant offers a higher rent.

In essence, renting in Estepona is relatively straightforward. Ensure you're well-informed, and if you have any queries, don't hesitate to reach out to our team for expert advice.