Taxes for US Citizens Buying Property in Spain

Important — read first. This guide is general information, not personalised tax or legal advice. Rates, thresholds, forms and deadlines are those we could verify against official sources as of the review date (28 July 2026) and they change by tax year, region and personal circumstances. This guide has not had human legal review. Confirm your specific case with a licensed advisor (asesor fiscal / abogado colegiado in Spain and a US tax professional) before acting or filing.

TL;DR: A US citizen buying a new-build home in Andalusia generally pays 10% VAT (IVA) plus 1.2% stamp duty (AJD); on a resale, a single 7% transfer tax (ITP) applies instead [1][8]. Ongoing, the owner pays local property tax (IBI) and, as a non-resident, IRNR at 24% on imputed or rental income via Modelo 210 [3][5]. On sale, the buyer withholds 3% of the price toward the seller’s capital-gains tax [3]. The US–Spain tax treaty is designed to prevent double taxation — Spanish tax paid can generally be credited on the US return through IRS Form 1116 [9][10][11] — but US FBAR (FinCEN 114) and FATCA (Form 8938) reporting on foreign accounts still applies [13][14][15].

Buying on the Costa del Sol as a US citizen means dealing with two tax systems at once. Spain taxes the purchase, the annual ownership and the eventual sale; the United States, almost uniquely, taxes its citizens on worldwide income regardless of where they live. For an American buyer of a “Life in Costa” new-build the core Spanish taxes are the same as for any other non-resident — what changes is the US layer: a double-taxation treaty granting a foreign tax credit, plus mandatory reporting of foreign assets. Figures below are Andalusia-specific where the tax is regional and reflect the rates in force at the review date.

Purchase taxes: new-build (obra nueva) vs. resale

A brand-new dwelling is subject to two taxes: VAT (IVA), a national tax at the reduced 10% rate for residential dwellings [8], plus Stamp Duty (AJD — Actos Jurídicos Documentados) on the notarised deed, levied in Andalusia at the general rate of 1.2% [1][2]. A resale instead pays a single Property Transfer Tax (ITP — Impuesto sobre Transmisiones Patrimoniales), a flat 7% in Andalusia [1][2]. The two regimes are mutually exclusive: you pay IVA + AJD or ITP, never both.

For ITP and AJD, Andalusia calculates the tax on the declared price or the official reference value (valor de referencia), whichever is higher — so the base can exceed the price paid [1]. The self-assessment is filed with the Junta de Andalucía (not the state AEAT) on Modelo 600, within two months from the day after signing the deed (for taxable events on or after 1 January 2022) [1].

Ongoing annual taxes for non-resident owners

You face two recurring taxes. Local property tax (IBI — Impuesto sobre Bienes Inmuebles) is a municipal tax paid yearly to the town hall (Ayuntamiento) on the property’s cadastral value (valor catastral); each municipality sets its own rate within statutory bands [5]. Non-Resident Income Tax (IRNR — Impuesto sobre la Renta de No Residentes) is filed on Modelo 210 [3][6]: even if you never rent the home out, Spain levies IRNR on an “imputed income” computed as a percentage of the cadastral value; if you rent it, you declare the rental income [4]. For US citizens — treated as non-EU/EEA residents — the IRNR rate is 24% [3][4].

A point specific to non-EU/EEA owners (including US citizens): historically they have been taxed on gross rental income, without the expense deductions available to EU/EEA residents. Recent Spanish case law has begun to challenge this, so it may be evolving — confirm whether you can deduct expenses with a Spanish tax advisor [4].

Wealth tax (Impuesto sobre el Patrimonio) in Andalusia

Spain applies a national wealth tax on worldwide assets for residents and on Spanish-situated assets for non-residents [7]. However, Andalusia grants a 100% bonificación on the regional quota, which in practice eliminates the ordinary wealth tax for property owners in the region. A separate state-level “solidarity” tax on large fortunes (ITSGF) can still apply to net wealth above roughly €3 million [7]. Confirm your exposure with an advisor if your total assets are substantial.

Selling: capital gains and the 3% retention

Two Spanish taxes apply on a sale. Capital gains — sale price minus documented acquisition cost and expenses — are taxed within IRNR; the treaty confirms real-estate gains are taxable where the property is located [8][9]. To secure that tax, Spanish law requires the buyer of a property from a non-resident to withhold 3% of the total sale price and pay it to the Tax Agency on the seller’s behalf using Modelo 211 [3]. This 3% is a payment on account: the seller then files a final Modelo 210 (generally within four months) to compute the real gain, reclaiming any excess or paying the balance [3][6]. Separately, the town hall levies plusvalía municipal (IIVTNU) on the increase in urban land value, payable by the seller [5].

The US tax layer: citizenship-based taxation and reporting

The defining difference for an American is citizenship-based taxation: the US taxes its citizens on worldwide income regardless of residence, so you keep filing a US return (Form 1040) every year even while living in Spain [12]. The US–Spain double-taxation treaty is designed to stop the same income being taxed twice: you generally pay Spain first on property income and capital gains, then report that income on your US return and claim a Foreign Tax Credit for the Spanish tax paid on IRS Form 1116 [8][9][10][11]. How the credit applies depends on your circumstances — confirm with a US tax professional.

US persons also have mandatory information-reporting duties on foreign assets, with severe penalties for non-compliance. The FBAR (FinCEN Form 114) must be filed if the aggregate value of your foreign financial accounts — including a Spanish bank account — exceeds $10,000 at any point in the year; it is filed online with FinCEN, separately from the tax return [13]. FATCA (IRS Form 8938) must be filed with your return if your specified foreign financial assets exceed the threshold — for a single US person living abroad, more than $200,000 on the last day of the year or $300,000 at any time during it [14][15]. Directly held Spanish real estate is generally not itself a “specified foreign financial asset” for Form 8938, but Spanish bank and investment accounts are [14][15].

The process, in order

1. Obtain a NIE (Número de Identificación de Extranjero) — required to sign the deed, open a bank account or pay tax in Spain [3].
2. Open a Spanish bank account (reportable on your FBAR once foreign accounts total over $10,000) [13].
3. Pay the purchase tax on Modelo 600 within two months from the day after signing the deed (for taxable events on or after 1 January 2022) [1].
4. Register the property at the Land Registry (Registro de la Propiedad).
5. Set up annual obligations: direct-debit the IBI, and file Modelo 210 for imputed-income IRNR (filed during the year after accrual, up to 31 December) [3][6].
6. File your US returns each year (Form 1040; Form 8938 if over the FATCA threshold; FBAR if over $10,000) [13][14][15].
7. On sale, the buyer withholds 3% via Modelo 211; you file a final Modelo 210 within four months to reconcile it [3][6], then claim the Foreign Tax Credit on IRS Form 1116 [9][10].

FAQ

Q: Will I be taxed twice — by Spain and by the US?
Generally no. The US–Spain treaty is designed to prevent it: you typically pay Spain first on rental income and capital gains, then claim a Foreign Tax Credit for the Spanish tax paid on IRS Form 1116 [8][9][10]. The exact relief depends on your situation — confirm with a US tax professional.

Q: Do US citizens pay higher Spanish property taxes than other foreigners?
For the core purchase and ownership taxes, an American is generally treated like any other non-EU/EEA buyer. The IRNR rate is 24% for non-EU/EEA residents versus 19% for EU/EEA residents [3][4]. The real difference is the extra layer of US filing driven by citizenship-based taxation, not a higher Spanish rate [12].

Sources:
[1] Junta de Andalucía — Agencia Tributaria de Andalucía, ITP y AJD (Andalusia rates) — https://www.juntadeandalucia.es/agenciatributariadeandalucia/ciudadanos/tributos/itpajd.html
[2] BOE — Real Decreto Legislativo 1/1993, Texto Refundido de la Ley del ITP y AJD — https://www.boe.es/buscar/act.php?id=BOE-A-1993-25359
[3] Agencia Tributaria (AEAT) — Non-residents (IRNR): imputed income, rental income, 3% withholding on sale, Modelo 210/211 — https://sede.agenciatributaria.gob.es/Sede/en_gb/no-residentes.html
[4] BOE — Real Decreto Legislativo 5/2004, Texto Refundido de la Ley del Impuesto sobre la Renta de no Residentes (IRNR) — https://www.boe.es/buscar/act.php?id=BOE-A-2004-4675
[5] BOE — Real Decreto Legislativo 2/2004, Ley Reguladora de las Haciendas Locales (IBI y plusvalía municipal / IIVTNU) — https://www.boe.es/buscar/act.php?id=BOE-A-2004-4214
[6] Agencia Tributaria (AEAT) — Modelo 210, procedimiento de declaración del IRNR (G212) — https://sede.agenciatributaria.gob.es/Sede/procedimientoini/G212.shtml
[7] BOE — Ley 19/1991, del Impuesto sobre el Patrimonio (wealth tax; regional bonifications) — https://www.boe.es/buscar/act.php?id=BOE-A-1991-14392
[8] BOE — Ley 37/1992, del Impuesto sobre el Valor Añadido (IVA; reduced 10% rate on new dwellings, art. 91) — https://www.boe.es/buscar/act.php?id=BOE-A-1992-28740
[9] IRS — United States–Spain Income Tax Convention (treaty text, PDF) — https://www.irs.gov/pub/irs-trty/spain.pdf
[10] IRS — Foreign Tax Credit — https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit
[11] IRS — About Form 1116, Foreign Tax Credit (Individual) — https://www.irs.gov/forms-pubs/about-form-1116
[12] IRS — U.S. Citizens and Resident Aliens Abroad (citizenship-based filing obligation) — https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad
[13] FinCEN — Report of Foreign Bank and Financial Accounts (FBAR / FinCEN Form 114) — https://www.fincen.gov/report-foreign-bank-and-financial-accounts
[14] IRS — About Form 8938, Statement of Specified Foreign Financial Assets (FATCA) — https://www.irs.gov/forms-pubs/about-form-8938
[15] IRS — Summary of FATCA reporting for U.S. taxpayers (filing thresholds) — https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-us-taxpayers

Published by eVoost (Editorial) for general orientation only. This does not constitute legal or tax advice. Rates, thresholds and deadlines were verified against official sources as of 28 July 2026 and change by tax year and personal circumstances. This guide has not undergone human legal review. Confirm your specific case with a licensed advisor (asesor fiscal / abogado colegiado and a US tax professional) before acting.