Taxes for Irish Buyers of New-Build Property in Spain

Buying a new-build home on the Costa del Sol is a well-trodden path for Irish purchasers, and the tax position for Irish buyers is more favourable than for many other foreign nationals. Because Ireland is a member of the European Union, Irish citizens enjoy freedom of movement, need no visa or investor scheme to buy, and are taxed at the lower European Union rate under Spain’s non-resident income tax (IRNR). This guide sets out the taxes for Irish buyers of new-build property in Spain, from the moment you sign to the day you sell, using figures confirmed against official sources for 2026. It is general information, not personal tax advice: always confirm your own position with a qualified Spanish tax adviser (asesor fiscal).

Why Irish buyers get a better deal

As EU citizens, Irish nationals can purchase Spanish property with no restrictions and do not need a Golden Visa or any entry permit. ⁷ The single most valuable consequence is fiscal: residents of the EU, Iceland, Liechtenstein and Norway pay IRNR at 19% and may deduct allowable expenses, whereas non-EU owners (including UK residents since Brexit) pay 24% on gross income with no deductions. ² Being Irish therefore saves you money every single year you own the property.

Taxes you pay when you buy a new-build

A brand-new home bought directly from the developer is a first transfer, so it is subject to IVA (VAT) and not to the transfer tax (ITP) that applies to resale homes. Two taxes apply at purchase:

IVA (VAT) at 10%

IVA on a new-build residential property is 10% of the declared purchase price. ¹ Subsidised housing (Vivienda de Protección Oficial, VPO) can qualify for 4%, but this rarely applies to Costa del Sol new-builds aimed at foreign buyers. Note a common trap: a garage space or storeroom bought separately from the home (not on the same deed) is taxed at 21%, not 10%. ¹

AJD (stamp duty) at 1.2% in Andalusia

Actos Jurídicos Documentados (AJD) is the stamp duty on the notarised deed. The general rate in Andalusia is 1.2% of the price. ³ So the headline combined transaction tax on a new-build in Andalusia is 10% IVA plus 1.2% AJD.

On top of tax you should budget for notary fees, Land Registry inscription, and your own solicitor. As a rough rule, total purchase costs on a new-build come to around 12–14% of the price. You will also need a NIE (Número de Identidad de Extranjero) before completion, which every non-Spanish buyer must obtain. See our related guides on buying costs and the NIE application for the full breakdown.

Annual taxes for Irish non-resident owners

If you keep your Costa del Sol home as a holiday base and remain tax-resident in Ireland, you face two recurring Spanish taxes.

IBI (local property tax)

Impuesto sobre Bienes Inmuebles (IBI) is the annual municipal property tax, levied by the town hall on the cadastral value (valor catastral). Rates are set locally and typically fall in the region of 0.4% to 1.1% of the cadastral value per year, so the exact amount depends on your municipality.

IRNR imputed income (Modelo 210)

This surprises many first-time buyers. Even if you never let the property and simply use it yourself, Spain deems a notional income from it and taxes you on it. The taxable base is 1.1% of the cadastral value if that value was revised within the previous ten tax years, or 2% otherwise. ⁵ That base is then taxed at your IRNR rate, which as an Irish (EU) resident is 19%. ²⁶ You declare it annually on Modelo 210, filed with the Agencia Tributaria in the year following the tax year.

Rental income

If you let the property, actual rental income replaces the imputed income for the periods let. Here the Irish advantage matters most: as an EU resident you are taxed at 19% on the net rent and may deduct proportionate expenses such as community fees, IBI, insurance, repairs, mortgage interest and agency costs. ² Non-EU owners get none of these deductions. Rental income is generally declared quarterly on Modelo 210. Keep every invoice, because deductions must be documented.

The Spain-Ireland double taxation treaty

Ireland and Spain signed a Convention for the avoidance of double taxation on 10 February 1994. ⁴ For property, the rule is simple: immovable property is taxed in the country where it is located, so Spain has the first taxing right over your Costa del Sol home’s rental income, imputed income and any gain on sale. ⁴ You still declare Spanish-source income to Irish Revenue, but Ireland grants a credit for the Spanish tax paid so you are not taxed twice on the same income. The treaty allocates rights rather than cancelling the Spanish liability, so filing your Modelo 210 correctly in Spain is what makes the Irish credit work.

Taxes and retentions when you sell

Selling as a non-resident triggers three items:

• The 3% retention (Modelo 211). The buyer must withhold 3% of the sale price and pay it to the Agencia Tributaria within one month as an advance against your capital gains tax. ⁸ You reclaim any excess if your actual gain is small or nil.
• Capital gains tax. The gain (sale price less acquisition cost and allowable expenses) is taxed under IRNR at a flat 19% for non-residents. ⁸ You file Modelo 210 within four months of the sale to settle the balance or claim a refund of the retention.
• Plusvalía municipal. This municipal tax on the increase in urban land value is paid by the seller within 30 business days of the sale. Since a 2021 reform you may choose the objective method or the real-gain method, and if the land value has not risen, no plusvalía is due under the real-gain calculation. ⁸

Financing: mortgages for Irish non-residents

Irish buyers borrowing from a Spanish bank as non-residents typically obtain 60% to 70% loan-to-value, with the higher end reserved for stronger financial profiles. ⁹ The bank lends against the lower of its own valuation (tasación) or the purchase price, so a low appraisal means you make up the difference in cash. ⁹ Fixed rates for EU non-resident borrowers in 2026 have been running in the region of 3.8% to 4.5%. ⁹ Mortgage interest is deductible against EU-resident rental income, another reason the Irish position is favourable.

Buyer protection on off-plan purchases (Ley 57/68)

Many Costa del Sol new-builds are sold off-plan with staged payments during construction. Spanish law (originally Ley 57/1968, reinforced by Ley 20/2015) requires the developer to place your deposits in a dedicated account and back them with an individual bank guarantee (aval bancario) or insurance policy. ¹⁰ If the home is not delivered on time, you are entitled to recover 100% of your payments plus statutory interest, and this protection cannot be waived in the contract. ¹⁰ Always confirm in writing that your guarantee is in place before paying a deposit.

Residency, healthcare and registration

Irish citizens may enter and stay in Spain freely. For stays over 90 days you register for the Certificado de Registro de Ciudadano de la Unión Europea (the EU citizen’s green certificate) within the first three months. ⁷ For healthcare, working Irish residents contribute to Spanish social security; Irish pensioners can use the S1 form to register with the Spanish public system with Ireland reimbursing the cost, while the EHIC only covers temporary stays and is not a substitute for resident cover. ⁷ Buying property does not by itself change your tax residency: you become Spanish tax-resident if you spend more than 183 days a year in Spain, which shifts you from IRNR to full Spanish resident income tax. See our related guide on residency and moving to Spain.

Key takeaways for Irish buyers

Budget roughly 12–14% on top of the price for a new-build (10% IVA, 1.2% AJD and costs), get your NIE early, and remember the recurring Modelo 210. Your EU status is worth real money through the 19% IRNR rate and expense deductions, and the Spain-Ireland treaty protects you from double taxation. Because this is money and legal territory, engage an independent Spanish solicitor and asesor fiscal before you commit.