Taxes for German Buyers Buying Property in Spain (Costa del Sol)

Important — please read first. This guide is general information, not personalised legal or tax advice. Rates, thresholds and deadlines are stated as in force at the review date (28 July 2026) and change by tax year and by municipality. Individual situations vary (residency, other income, ownership structure). Before you buy, sell or file anything, confirm your own case with a qualified Spanish tax adviser or abogado colegiado (and, for the German side, a Steuerberater).

TL;DR: A German resident buying a new-build home on the Costa del Sol (Andalusia) pays a one-time Spanish purchase tax of about 11.2% (10% VAT + 1.2% AJD stamp duty) [3][4]. Annually they pay the local property tax (IBI) and a national non-resident income tax (IRNR) at the 19% EU/EEA rate — even if the home is never rented, on an imputed income [1]. Under the Spain–Germany double-taxation treaty (in force since 18 October 2012) [5][8], income and capital gains from the property are taxed in Spain; that income is exempt from German tax but raises the rate applied to your remaining German income (Progressionsvorbehalt) [7].

Purchase taxes are the same for any buyer regardless of nationality. What changes because you are German is the ongoing taxation of property income and the eventual sale, shaped by the Double Taxation Agreement (DTA) between Germany and Spain [5][8]. The treaty allocates the right to tax income from immovable property (rental or imputed) and capital gains to Spain [5]. That Spanish income is exempt from German income tax, but German law includes it when setting the progressive rate applied to your remaining German income — the Progressionsvorbehalt [7].

The Spain–Germany Double Taxation Agreement (signed 2011, in force 2012)

The treaty was signed in Madrid on 3 February 2011, entered into force on 18 October 2012 and applies from 2013 [5][8]. It prevents income being taxed in both countries and clarifies which state may tax which revenue.

• Article 6 (Income from Immovable Property): Spain may tax income from your Costa del Sol property — rental income and, for non-residents, the “imputed income” Spain taxes even for personal use [5].
• Article 13 (Capital Gains): Spain may tax any capital gain on selling the property; Germany exempts that gain [5].
• Article 22 (Elimination of Double Taxation): Germany applies the exemption method with a progression clause (Progressionsvorbehalt): the Spanish income is not taxed in Germany but is added to your total income to set the rate applied to your other German-source income [5][7].

Spanish Taxes for a German Non-Resident Owner

• At purchase (new-build): For a new home bought from a developer in Andalusia, Value Added Tax (IVA) is 10% [3] and Stamp Duty (AJD — Actos Jurídicos Documentados) is 1.2% [4]. New-builds pay IVA + AJD, never ITP.
• Property Tax (IBI): A municipal tax paid annually on the cadastral value (valor catastral). The rate is set by each town hall and, for urban property, typically falls in the 0.4%–1.1% range — check the rate for your municipality.
• Non-Resident Income Tax (IRNR): Filed on Form 210 (Modelo 210) [1].
  • Personal use: tax on an “imputed income.” The taxable base is 1.1% of the cadastral value (if that value was revised within the last 10 years) or 2% otherwise, taxed at 19% for EU/EEA residents [1].
  • Rented out: 19% on the net rental income. As an EU/EEA resident you may deduct related expenses (IBI, community fees, insurance, mortgage interest, maintenance) [1].
• Wealth & Solidarity Tax: Andalusia applies 100% relief on its regional Wealth Tax, so the regional bill is effectively zero [4]. Separately, a national Solidarity Tax on Large Fortunes — still in force for 2026 — can apply to large Spanish net wealth: a €700,000 exempt minimum applies and its scale only begins above €3 million of taxable base, so most individual buyers fall well below it [6].
• At sale — Capital Gains (IRNR): The profit is taxed at 19% for EU/EEA residents. The gain is the sale price minus acquisition cost (purchase price plus taxes/fees) and major-improvement costs [1].
• At sale — 3% Retention (Retención): The buyer must withhold 3% of the sale price and pay it to the Agencia Tributaria (via Form 211) as an advance against your capital-gains liability. You then file Form 210 to settle the final bill, or claim a refund if the 3% withheld exceeds the tax due on your actual gain [1].
• At sale — Plusvalía Municipal (IIVTNU): A local tax on the increase in value of the urban land (not the building) during ownership; it is generally the seller’s responsibility.

German Tax Reporting Obligations

Even though the income is taxed in Spain, it must be declared in Germany on the annual income-tax return (Einkommensteuererklärung) [7][9].

• Anlage V (renting and leasing): Details rental income and deductible expenses from the Spanish property, calculated under German rules, to determine profit or loss [9].
• Anlage AUS (foreign income): Declares the foreign income subject to the Progressionsvorbehalt; the figure from Anlage V is reported here so it is correctly included when setting the German tax rate while remaining exempt from direct German tax [7][9].

How a German buyer typically settles Spanish property taxes

1. At purchase: On signing the deed (escritura), the buyer’s lawyer generally pays the 10% IVA to the developer and files and pays the 1.2% AJD to the Andalusian regional tax authority [3][4].
2. Annually (IBI): The town hall (Ayuntamiento) issues an annual IBI bill (often by direct debit); deadlines vary by municipality, typically around August–November.
3. Annually (IRNR — personal use): Imputed-income Form 210 for a calendar year is filed during the following year, with a deadline of 31 December of that following year [1].
4. Rental income (IRNR): For accruals from 2024, rental income is grouped annually on one Form 210 per property, filed 1–20 January of the year after accrual (separate/quarterly filing — first 20 days of April, July, October, January — remains optional) [1].
5. Annually (German return): Declare the Spanish property and income using Anlage V and Anlage AUS to apply the Progressionsvorbehalt [7][9].
6. At sale: The buyer withholds 3% via Form 211 within one month; the seller then has three further months (about four from the sale) to file Form 210, declare the gain and reclaim any excess retention. The Plusvalía Municipal is generally paid to the town hall within about 30 days [1].

FAQ

Q: Do I really pay tax in Spain if I don’t rent out my holiday home?
A: Generally yes — Spain charges IRNR on “imputed income” (renta imputada) even if the property stays empty (base 1.1% or 2% of cadastral value, 19% for EU/EEA residents, on Form 210) [1].

Q: How does the Progressionsvorbehalt affect my German taxes?
A: Your tax-exempt Spanish income is added to your German income only to set your personal tax rate, which then applies to your German income — so the Spanish income is not taxed directly but your overall German rate can rise. This is set out in EStG §32b [7].

Q: Can I deduct mortgage interest from Spanish tax?
A: If you are an EU/EEA resident renting out the property, you may generally deduct mortgage interest and other related expenses before the 19% tax. For personal use, no deductions are allowed against the imputed-income tax [1].

Q: What is the 3% retention and will I get it back?
A: It is a mandatory withholding the buyer makes when buying from a non-resident seller — an advance toward your capital-gains tax, not a separate tax. If the tax due on your actual gain is less than the 3% withheld you can claim the difference back on Form 210 [1].

Q: Is my Spanish rental income taxed twice, in Spain and Germany?
A: No. Under Article 22 of the treaty Germany uses the exemption method: the income is taxed only in Spain and exempt in Germany, with the Progressionsvorbehalt as the only German effect [5][7].

Reminder: this guide is general information published by eVoost (Editorial), not individual legal or tax advice. Rates, thresholds and deadlines are as in force at the review date (28 July 2026) and can change. Always confirm your own case with a qualified Spanish tax adviser or abogado colegiado and, for German matters, a Steuerberater.

Sources

[1] Agencia Tributaria (AEAT) — Manual práctico de Tributación de No Residentes (IRNR): 19% EU rate, imputed income (1.1%/2%), rental income, Form 210 deadlines and the 3% retention — https://sede.agenciatributaria.gob.es/Sede/ayuda/manuales-videos-folletos/manuales-practicos/manual-tributacion-no-residentes.html
[2] Agencia Tributaria (AEAT) — Non-residents (Sede electrónica, English): general obligations of non-resident property owners — https://sede.agenciatributaria.gob.es/Sede/en_gb/no-residentes.html
[3] Agencia Tributaria (AEAT) — IVA (Impuesto sobre el Valor Añadido): 10% reduced VAT rate on new-build dwellings — https://sede.agenciatributaria.gob.es/Sede/iva.html
[4] Boletín Oficial del Estado — Ley 5/2021 de Tributos Cedidos de la Comunidad Autónoma de Andalucía (BOE-A-2021-17915, texto consolidado): 1.2% AJD rate and 100% relief on regional Wealth Tax — https://www.boe.es/buscar/act.php?id=BOE-A-2021-17915
[5] Boletín Oficial del Estado — Instrumento de Ratificación del Convenio entre España y la República Federal de Alemania para evitar la doble imposición (BOE-A-2012-10212): treaty text, Articles 6, 13 and 22 — https://www.boe.es/buscar/doc.php?id=BOE-A-2012-10212
[6] Boletín Oficial del Estado — Ley 38/2022, de 27 de diciembre (creating the Impuesto Temporal de Solidaridad de las Grandes Fortunas; €700,000 exempt minimum; scale begins above €3,000,000; extended indefinitely by RDL 8/2023) — https://www.boe.es/buscar/act.php?id=BOE-A-2022-22685
[7] Gesetze im Internet (Bundesministerium der Justiz) — § 32b Progressionsvorbehalt, Einkommensteuergesetz (EStG) — https://www.gesetze-im-internet.de/estg/__32b.html
[8] Bundesgesetzblatt — Bekanntmachung über das Inkrafttreten des deutsch-spanischen Doppelbesteuerungsabkommens (BGBl. 2013 II S. 329): DTA in force 18 October 2012 — https://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&jumpTo=bgbl213s0329.pdf
[9] Bundesfinanzverwaltung / Bundesfinanzministerium — Formulare für die Einkommensteuererklärung (official portal for German tax forms, incl. Anlage V and Anlage AUS) — https://www.formulare-bfinv.de/