Taxes for UAE-Based Buyers of Property in Spain

Buying on the Costa del Sol from the United Arab Emirates is straightforward, but the tax treatment differs in important ways from that of an EU purchaser. This guide sets out the taxes for UAE-based buyers of property in Spain: what you pay at purchase, what you pay every year as a non-resident, and what happens when you sell. All figures relate to Andalusia (which governs the whole Costa del Sol) and are current for 2026. Keep the Spanish form names as they appear, since your lawyer (abogado) and gestor will use them.

Purchase taxes for UAE buyers: new-build versus resale

The single biggest tax at completion depends on whether the home is a new-build (bought first-hand from the developer) or a resale (second-hand). This split applies to every buyer regardless of nationality, so a UAE resident faces the same purchase rates as anyone else.

New-build property: IVA plus AJD

A new dwelling bought directly from the promoter carries IVA (VAT) at 10% of the declared price, plus AJD (Impuesto sobre Actos Jurídicos Documentados, stamp duty) at 1.2% in Andalusia. The combined tax burden on a new-build is therefore about 11.2% ¹². IVA is paid to the developer on each stage payment and the AJD is settled when the deed (escritura) is signed and registered.

Resale property: ITP

A second-hand home is exempt from IVA and instead attracts ITP (Impuesto sobre Transmisiones Patrimoniales, transfer tax) at a flat 7% in Andalusia ¹². There is no separate AJD on a resale, because the two taxes are mutually exclusive. Reduced ITP rates exist in Andalusia (for example for a main home under a price cap, or for professional resellers), but these rarely apply to an overseas second-home buyer, so budget for the full 7%.

Other completion costs

On top of the tax, allow for notary fees (roughly 550 to 1,400 euros on a national scale), Land Registry fees (about 400 to 950 euros), and legal or conveyancing fees ¹. A realistic all-in budget is about 13% to 15% over the price for a new-build and roughly 9% to 11% for a resale ¹. If you are buying off-plan, deposits paid before delivery must by law be secured by a bank guarantee or insurance policy (the protection historically known as Ley 57/1968, now embedded in the Ley de Ordenación de la Edificación); insist on seeing that guarantee. See our related guides on buying costs and off-plan purchases for the full breakdown.

Getting a NIE and paying as a non-resident

Every buyer needs an NIE (Número de Identidad de Extranjero), the Spanish foreigner tax number, before completing. UAE nationals can apply at the Spanish Consulate in Abu Dhabi or Dubai, or in Spain, and a lawyer can act under power of attorney. The NIE is what links you to the Agencia Tributaria (the Spanish tax authority) for every filing described below.

Annual tax as a non-resident owner: IRNR and Modelo 210

Once you own a Costa del Sol home but live in the UAE, you are a non-resident for Spanish tax and fall under IRNR (Impuesto sobre la Renta de no Residentes). The key point for UAE buyers is the rate: residents of the EU or EEA are taxed at 19%, but because the UAE sits outside that zone, a UAE-based owner is taxed at the general non-resident rate of 24% ³.

If you keep the property for your own use

If the home is not rented out, Spain charges tax on a notional “imputed income”. This is calculated as 2% of the cadastral value (valor catastral), reduced to 1.1% where the cadastral value has been revised in recent years ⁴. That base is then taxed at the 24% non-resident rate and declared once a year on Modelo 210 ³⁴. In practice the annual bill on a modestly valued apartment is often a few hundred euros, but it must be filed even in a year with no rental income.

If you rent the property out

Rental income is also declared on Modelo 210 and taxed at 24% for a UAE resident. Crucially, the deduction of expenses (mortgage interest, community fees, repairs, agency fees) against rental income is only available to EU/EEA residents taxed at 19%. As a non-EU landlord you are generally taxed on the gross rent at 24%, without deducting costs ³. This asymmetry is the main reason a UAE buyer’s effective tax on rental yield is higher than an EU neighbour’s, and it is worth modelling before you count on net rental returns.

IBI and other local charges

Separately from IRNR, every owner pays IBI (Impuesto sobre Bienes Inmuebles), the annual municipal property tax, set by each town hall (ayuntamiento) as a percentage of the cadastral value, typically in the range of 0.4% to 1.1% for urban property ⁵. Expect also a rubbish/refuse charge (basura) and community fees if the home is in a development. These are local costs, not something the Spain-UAE treaty affects.

Wealth tax and the solidarity tax

Non-residents are liable to Spanish wealth tax only on assets located in Spain, with a general tax-free allowance of 700,000 euros per person ⁵. Andalusia applies a full regional rebate, so the standard regional wealth tax is effectively neutralised. However, the state-level Solidarity Tax on Large Fortunes (Impuesto Temporal de Solidaridad de las Grandes Fortunas) still bites on net Spanish wealth above 3 million euros, at progressive rates from 1.7% up to 3.5% ⁵. For most single-property buyers this is not in scope, but high-value or multi-property UAE investors should take advice before structuring a purchase.

Selling: the 3% retention and capital gains

When a non-resident sells Spanish property, the buyer is legally required to withhold 3% of the sale price and pay it directly to the Agencia Tributaria (via Modelo 211) as an advance against the seller’s tax ¹. The seller then files Modelo 210 to settle the actual capital gain, which for non-residents is taxed at 19% ³. If the 3% withheld exceeds the real 19% liability (or there is a loss), the excess is refundable; if the gain is larger, the balance is due. A separate municipal tax on the increase in land value, plusvalía municipal, is normally the seller’s responsibility. Keep every invoice from the purchase (taxes, notary, legal, improvement works), because these raise your cost base and reduce the taxable gain.

The Spain-UAE double tax treaty (and why it may not help)

Spain and the UAE have a double taxation treaty in force since 2007 ⁶. Its purpose is to prevent the same income being taxed twice and to allocate taxing rights. However, income from immovable property is taxable in the country where the property sits, so Spain retains the right to tax your Costa del Sol home under the treaty. Because the UAE levies no personal income tax on individuals, there is usually no UAE tax against which to credit the Spanish tax you have paid. The practical effect is that the Spanish IRNR and capital gains tax tend to be a final cost, not something you recover at home. Treat any figure you have seen quoted for an EU buyer as a floor, not your number.

Residency, visas and mortgages

Buying property no longer buys residency. Spain’s Golden Visa, which granted residency for a 500,000 euro property investment, closed to new applicants on 3 April 2025 under Organic Law 1/2025; existing holders keep their rights but the property route is gone ⁷. UAE nationals who want to live in Spain now use the ordinary routes, mainly the non-lucrative visa (for those with sufficient passive income) or the digital nomad visa (for remote workers) ⁷. Owning a Costa del Sol home can support such an application but does not by itself confer the right to stay beyond the standard 90-day Schengen tourist limit.

On financing, Spanish banks lend to non-residents but on tighter terms than to residents. As a rule of thumb, non-resident buyers should expect a loan-to-value around 60% to 70% of the purchase or valuation price, with the balance and all taxes funded from your own resources. Confirm the exact figure with the lender, as policy varies by bank and by buyer profile.

A worked example

These are the headline rules; your exact position depends on the cadastral value, the price and whether you rent. Always engage a Spanish lawyer and a gestor before signing, and read our related guides on purchase costs, the buying process and residency options.

This guide is general information, not tax or legal advice. Rates and thresholds change; confirm current figures with the Agencia Tributaria or a qualified adviser before you transact.