Why invest in Spanish property?

Spain's property rules are set at national, regional and local level. Purchase taxes are set by region, holiday letting is licensed locally, and since Brexit a UK resident is a non-EU buyer, which changes the tax on rent.

Each rule below was checked against an official Spanish or UK source. International developments are being added to PROXERA; none is listed yet.

The NIE. This personal number is for foreigners with economic, professional or social dealings with Spain. From the UK you apply to the Spanish consulate in London on form EX-15. The consulate says it is normally issued within three weeks and does not give the right to live in Spain.

Defence zones. In restricted zones of interest to national defence, a foreign buyer needs military authorisation. Law 8/1975 exempts EU nationals, which UK nationals no longer are.

A proposed tax. In May 2025 the Socialist group tabled bill 122/000196, which would tax purchases by buyers not resident in the EU at 100% of the value, less transfer tax paid, excluding purchases subject to VAT. A bill is not law: check its progress before you commit.

Visits. UK visitors can stay in the Schengen area for up to 90 days in any 180-day period without a visa (GOV.UK).

A new home from the developer carries VAT (IVA) at 10%, or 4% for protected housing of the special regime; a resale carries transfer tax (ITP) instead (Agencia Tributaria). A notarial deed not subject to transfer tax, such as a new-build purchase, also pays stamp duty (AJD) at the regional rate (Royal Legislative Decree 1/1993, article 31.2). The taxable value is the cadastral reference value, or the declared price if higher (Cadastre).

The example assumes the price is at or above the reference value. Andalusia's general rates of 7% and 1.2% have applied since 28 April 2021 (Junta de Andalucía), with the return due within two months (Junta de Andalucía). Notary, registry and legal fees are extra.

Tourist letting is licensed by the regions. In Andalusia the owner files a declaración responsable with the tourism register before starting, shows its code in all advertising, confirms municipal planning allows the use, and provides a certificate of the community of owners' express approval (Junta de Andalucía).

Since 3 April 2025 a new tourist use in a block needs the vote of three fifths of all owners, with transitional rules for existing operators (Organic Law 1/2025). The registration procedure of the national rentals register in Royal Decree 1312/2024 was annulled by the Supreme Court on 19 May 2026. Royal Decree-law 29/2026 requires adverts to show the tourist code where one exists and changes VAT on furnished lets of up to 30 nights from 1 December 2026. See our short-term lets guide for the UK comparison.

The treaty. The UK and Spain convention, signed on 14 March 2013 and in force from 12 June 2014, lets Spain tax income from Spanish property (Article 6) and gains on selling it (Article 13); the UK credits Spanish tax against UK tax on the same income or gains (Article 22) (text).

Rent. UK residents normally pay UK tax on rent from overseas property (GOV.UK). It forms an overseas property business, separate from UK lettings, and losses cannot cross between them (PIM4702). From 2027 to 2028 property income, including overseas profits, is taxed at 22%, 42% and 47% (Finance Act 2026, s6, s7). Furnished holiday lettings rules ended in April 2025 (GOV.UK), and former EEA holiday lets are now UK or overseas property businesses (CA20025).

Relief. Claim Foreign Tax Credit Relief on the SA106 foreign pages. You may not recover all the foreign tax, for example where UK tax on the same income is lower (GOV.UK), and Spain taxes gross rent while the UK taxes profit.

Gains. On land abroad you pay tax in both countries and claim relief in the UK. CGT is 18% within the basic rate band and 24% above, with a £3,000 allowance in 2026 to 2027 (GOV.UK). HMRC's real time CGT service cannot claim foreign tax credit relief for overseas property, so use Self Assessment (GOV.UK).

Since 6 April 2025 a 4-year foreign income and gains regime has replaced the remittance basis for new arrivals after ten years of non-residence (GOV.UK). More in UK tax on overseas property.