As well as its favourable climate and quality of life, Spain offers several tax regimes specifically designed to attract foreign professionals, investors and property owners. This article provides a structured overview of the key tax advantages available to foreigners in Spain, with a focus on how they apply to property investment and relocation on the Costa del Sol. It is intended to help buyers understand the key points to consider when planning a move or investment, and how to structure their position correctly from the outset.

Understanding Tax Residency in Spain

Tax obligations in Spain depend primarily on whether an individual is classified as a tax resident or non-resident. An individual is considered a Spanish tax resident if at least one of the following conditions is met:

  • They spend more than 183 days per calendar year in Spain
  • Their primary economic interests are located in Spain
  • Their spouse or minor children reside in Spain

Tax residency status determines whether a person’s worldwide income is taxable in Spain, or only income generated from Spanish sources. This distinction is fundamental and should be established before acquiring property or generating income.

1. The Beckham Law (Special Expat Tax Regime)

One of Spain’s most attractive tax advantages for foreigners is the so-called ‘Beckham Law’, officially known as the Special Expat Tax Regime.

Purpose of the Beckham Law

This arrangement was designed to attract international professionals and executives by offering a simplified and predictable tax structure during their first years of residence in Spain.

Key Features

  • Flat 24% income tax rate on Spanish-source employment income up to €600,000
  • Spanish-source income above this threshold is taxed at approximately 47%
  • Valid for up to six years (the year of arrival plus five additional years)
  • Foreign-source income is not taxed in Spain under this structure

Why It Appeals for Foreign Buyers

For high-earning professionals relocating to Marbella, the Beckham Law can result in substantial tax savings compared to standard progressive income tax rates. It also provides clarity and predictability during the early years of relocation.

Eligibility depends on employment status, timing and formal application procedures. Professional advice is essential to ensure correct registration.

2. Non-Resident Income Tax (IRNR)

Foreigners who spend fewer than 183 days per year in Spain are generally classified as non-residents for tax purposes.

Applicable Tax Rates

  • 19% for residents of EU/EEA countries
  • 24% for non-EU residents

Non-resident tax applies only to Spanish-source income, including:

  • Rental income from Spanish property
  • Capital gains from the sale of Spanish assets
  • Certain dividends and interest payments

Rental income is taxed annually, even if the property is not let for the full year. Allowable deductions vary depending on residency status.

The IRNR framework allows foreign property owners to invest in Marbella without becoming fully exposed to Spanish worldwide taxation.

3. Key Property Taxes in Marbella

Investing in property in Spain involves a clear and largely predictable set of property-related taxes.

Annual Property Taxes

  • IBI (Impuesto sobre Bienes Inmuebles): a local annual property tax based on cadastral value
  • Non-resident imputed income tax: applies when a property is not rented

Transaction-Related Taxes

  • Municipal capital gains tax (Plusvalía): calculated on the increase in land value between purchase and sale
  • Capital gains tax: payable upon sale, with rates depending on residency and gain size

These taxes are well defined and transparent, making Spain a suitable location for long-term property investment strategies.

4. Wealth Tax (Impuesto sobre el Patrimonio)

Spain levies a wealth tax on net assets held as of December 31st each year. However, its impact varies significantly by region.

Key Points

  • A general allowance, typically around €700,000 per individual
  • Progressive tax rates applied above the allowance
  • Non-residents are taxed only on Spanish assets

Andalusia’s Advantage

Andalusia, where Marbella is located, currently offers major wealth tax relief, effectively neutralising the tax for many residents and non-residents. This regional policy has made Marbella particularly attractive for high-net-worth individuals compared to other parts of Spain.

5. Other Relevant Taxes to Consider

Foreign buyers should also be aware of additional taxes that may apply, depending on the property and transaction type:

  • ITP (Property Transfer Tax) for resale properties
  • VAT (IVA) on new-build properties
  • Stamp duty (AJD) associated with new developments
  • Financial transaction tax (0.2%) on certain Spanish shares

Understanding these costs in advance is essential for accurate budgeting and investment planning.

6. Tax Optimisation for Foreign Buyers

Effective tax planning is not about avoiding obligations, but about structuring residency, assets and income correctly from the beginning.

Key considerations include:

  • Choosing the appropriate tax residency status
  • Applying for the Beckham Law when eligible
  • Structuring ownership and income streams efficiently
  • Coordinating property acquisition with broader financial planning

Early professional guidance significantly reduces risk and prevents costly restructuring later.

Vertuom Insight

Vertuom works closely with top-tier multilingual real estate and tax lawyers to provide clear, reliable guidance for international buyers. Our role is to ensure that property decisions in Marbella are tax efficient as well as being aligned with legal requirements and long-term objectives. By combining local market intelligence with expert legal and tax coordination, we help clients navigate Spain’s tax landscape with confidence and clarity.

Spain offers a property purchase process that is transparent, legally secure and well structured for international buyers. Marbella stands out as one of Europe’s most resilient luxury real estate markets, combining lifestyle appeal with long-term investment stability.

Looking to invest or relocate to Marbella? Let Vertuom guide you through the process with clarity and precision.