When purchasing a property in Spain, it is important to understand that ownership comes with ongoing taxes and fees, some payable monthly, quarterly and others annually. These typically include local council taxes (IBI), refuse collection tax (Basura), community fees if the property is part of an urbanisation, and annual tax declarations.
Even non-residents – those who spend fewer than 183 days per year in Spain – are required to meet certain tax obligations simply by owning property. These costs can sometimes come as a surprise to foreign buyers, and in some cases, property owners may not even be aware that these payments are required.
Below is a summary of the main costs involved.
Community Fees
If your property forms part of an urbanisation or residential complex, you automatically become a member of the Community of Property Owners. As a member, you are required to pay community fees. These fees are mandatory contributions. They cover the maintenance and upkeep of communal areas such as gardens, patios, swimming pools, and shared grounds. They also contribute to the cost of hiring a professional management or administration company to oversee the community, security guards, cleaners, gardeners, etc…
These fees can be paid annually, quarterly or even semi-annually. Sometimes, the owners agree in the meeting of the community extra payments, if needed, to cover extra costs incurred.
Before buying a property, it is always important to review the community minutes to check whether there are any unexpected expenses, extra fees approved or any repairs to be carried out in the community.
IBI and Basura Taxes
IBI (council tax) and Basura (refuse collection tax) are local taxes paid to the town hall. These taxes are usually paid annually, but it will depend on the municipality that the property is located. Sometimes both taxes are included in the same bill. These taxes are broadly equivalent to council taxes or local rates in the UK. These funds are used to support local services and infrastructure, including roads, rubbish collection, street lighting, and general maintenance.
The IBI (Impuesto sobre Bienes Inmuebles) is a direct tax on property ownership which is payable by the owner of the property. The Basura (refuse collection tax) is a charge for the provision of refuse collection services. Both are mandatory local taxes.
The local authority sends the bills providing a time frame period for their payment. It is important to note that if you miss the payment during the indicated time frame some interest charges will be applicable to the bills, or even, penalties if the bills never get paid. In these cases, the local authority will register a charge with the Land Registry of properties stating the outstanding debt due for payment.
For convenience, it is advisable that you arrange to pay these bills by direct debit through your bank account in Spain to avoid unnecessary charges.
Annual Tax Declarations
If Spain is your main country of residence, you are required to submit an annual income tax return, known as the “Declaración de la Renta”. This applies to all Spanish residents.
However, non-residents must also file annual tax declarations “Impuesto sobre la Renta de No Residentes- IRNR” simply because they own a property in Spain. This is a state property tax and is payable in addition to any taxes you pay in your home country.
When you do not rent your property out, an imputed income is calculated at 2% of the rateable value or 1.1% if it has been revised in the last 10 years. The income tax rate is 19% for residents in the European Union, Iceland, and Norway. For residents in other countries, the rate is 24%.
If you rent your property out, the rent received is subject to taxation based on your earnings. You can deduct expenses related directly to the rental of your property such as management fees, mortgage interests, repairs, utility bills, community fees or home insurance. After deducting all allowable costs, rental income is taxed at 19% for residents in the European Union, Iceland, and Norway. For residents in other countries, the tax rate is 24%. However, the Spanish’s National High Court ruling of July 2025 states that non-EU residents have now the right to deduct rental expenses under the form 210- IRNR following the principles of tax equality and free movement of capital.
It is advisable to talk with your lawyer or accountant about your taxes to avoid double taxations. If you do not live in the European Union, you can also explore the possibility to claim refunds with regards to the overpaid taxes of the rental of your property for the past 4 years.
How to Pay These Taxes and Fees
Once the purchase of a property has been completed, it is standard practice for a lawyer acting on behalf of the buyer to transfer utility contracts, taxes, and community fees into the new owner’s name and also arrange direct debits for these payments.
If no lawyer is involved, responsibility for setting up and managing these payments falls entirely on the new owner.
IBI and Basura taxes are paid to the local authority, though the agency responsible may vary depending on the region (for example, Patronato in Málaga or Suma in Alicante). Payment of community fees should be arranged directly with the community president or administrator.
Property owners should ensure their bank accounts remain active and sufficiently funded. Direct debits can fail if accounts are underfunded or temporarily frozen (often due to missing non-resident fiscal documentation) leading to unpaid debts accumulating without the owner’s knowledge.
Tax Deadlines
The Resident TaxReturn (Modelo 100) must be filed by 30 June of the following year.
The Non-resident Income Tax Return (Modelo 210) must be declared by 31 December of the following year. For example, the taxes from year 2025 must be filed by 31 December 2026; although you can file your taxes at any time during that year.
Different rules apply if you rent your property out. In this case, you can file quarterly tax declarations in the current year or once per year between 1 to 20 January of following year.
What Happens if Payments Are Not Made?
If community fees are not paid, the community president will normally contact the property owner to request settlement. If debts continue to accrue, legal action may be taken, and in extreme cases this can lead to seizure of the property. If the property is sold, outstanding community debts may be deducted directly from the sale proceeds.
For substantial debts, communities may appoint debt collection agencies to pursue unpaid fees, even if the owner resides abroad.
If you have unpaid IBI or Basura taxes you will incur penalty charges, typically ranging from 1% to 20% of the outstanding amount. Continued non-payment may result in a charge being registered against the property. Where large sums are owed, it is often possible to agree on a payment plan with the local authority.
Failure to submit required tax returns on time may result in sanctions from the Spanish tax office, with penalties depending on the severity of the infraction. It is always advisable to seek professional advice if you are unsure whether you need to file a tax return.
How to Resolve Outstanding Debts or Taxes
If you are concerned about your tax position in Spain, have outstanding debts, or have a charge registered against your property, seeking legal advice is strongly recommended. We can help identify the most appropriate solution for your specific circumstances. Contact us on (+34) 951 552 254 or complete an online enquiry form, and a member of the team will be in touch.