Property Taxes and Costs in Marbella

By Elite Villas Marbella

Owning or buying property in Marbella comes with unique financial responsibilities. To help you navigate this process with confidence, we’ve crafted a clear and tailored guide, specifically designed for our buyers—tech-savvy, high-net-worth individuals seeking seamless and informed property transactions.

Table of Contents

1. 1. Understanding Costs When Purchasing Property
   2. Annual Taxes for Property Owners in Marbella
   3. Investing in Land: Tax Implications
   4. Tax Considerations for Residents vs. Non-Residents
   5. Costs and Taxes for Selling Your Property
   6. Renting Out Your Property: Owner Obligations
   7. Renting as a Tenant: What You Need to Know

1. Understanding Costs When Purchasing Property

Whether you’re buying a modern villa or a classic Andalusian townhouse, understanding taxes and fees is crucial.

New vs. Resale Properties

• • New Developments:
    
    • • VAT (IVA): 10% of the purchase price.
    • • Stamp Duty: 1.2% of the purchase price.
    • • These are payable on the day of signing at the notary.

• • Resale Properties:
    
    • • Transfer Tax (ITP): 7% of the purchase price.
    • • Transfer taxes must be paid within 30 days after the notary signing.

Additional Costs

• • Lawyer Fees: Typically 1% (+VAT) of the purchase price. A good lawyer ensures proper due diligence and after-sales service.

• • Notary and Registry Fees: Estimated at 0.15%-0.25% of the purchase price, decreasing with higher-value properties.

• • Bank Drafts and Transfers: Fees vary depending on the bank and payment method.

• • Mortgage Valuation: Costs between €500 and €2,000 for a property valuation, with other mortgage costs covered by the bank.

• • Technical Inspections: Optional but recommended for secondhand properties, costing €300 to €2,000.

2. Annual Taxes for Property Owners in Marbella

Owning a property in Marbella means ongoing responsibilities beyond the purchase:

Municipal Property Tax (IBI)

• • Paid yearly, based on the cadastral value of the property.

• • Costs typically range between €1,000 and €10,000.

Non-Resident Tax

• • Applies to non-resident owners, even if the property is not rented out.

• • Tax rate: 24% of imputed income or 19% for EU/EEA residents.

Wealth Tax

• • Replaced by the Solidarity Tax, applicable to net wealth over €3 million.

• • Rates range from 0.2% to 3.5%, with allowances for residents.

Garbage Tax

• • Typically under €400 per year, based on property size and location.

3. Investing in Land: Tax Implications

Buying land in Marbella carries different tax rates depending on the seller:

• • Private Seller: Transfer tax of 7%.

• • Company Seller: VAT at 21% + Stamp Duty at 1.2%.

This distinction can significantly impact costs, particularly for high-value plots. For instance, purchasing a €1 million plot from a company could result in an additional €152,000 in taxes.

4. Tax Considerations for Residents vs. Non-Residents

Defining Fiscal Residency

You may become a fiscal resident if:

• • You spend more than 183 days per year in Spain.

• • Your family or primary business is based in Spain.

Key Differences

• • Non-Residents: Subject to non-resident tax, municipal taxes, and wealth tax on Spanish assets only.

• • Residents: Pay taxes on global income, assets, and property, with income tax rates up to 47%.

5. Costs and Taxes for Selling Your Property

Selling your property in Marbella involves several costs:

Vendor Taxes

• • Capital Gains Tax: Paid on the profit from the sale, with rates of 19%-24% depending on residency.

• • Plusvalía Tax: A municipal tax based on the increase in the property’s land value.

Other Costs

• • Agency Fees: Typically 5%-6% of the sale price, plus VAT.

• • Mortgage Cancellation: Includes early repayment fees and notary costs.

• • Retention for Non-Residents: Buyers deduct 3% of the purchase price for the tax office. Any overpayment can be reclaimed later.

6. Renting Out Your Property: Owner Obligations

Owning a rental property in Marbella can be lucrative, but it comes with responsibilities:

Income Tax

• • Non-residents pay 24% (19% for EU/EEA residents).

• • Residents are taxed on a progressive scale from 19% to 47%.

Tax Deductions

Owners can reduce taxable income by deducting costs such as:

• • Mortgage interest.

• • Repairs and maintenance.

• • Property taxes and community fees.

• • Utility bills paid by the owner.

7. Renting as a Tenant: What You Need to Know

As a tenant in Marbella, your rental experience is generally straightforward:

• • No Taxes on Rent: The rental price you see is what you pay.

• • Agency Fees: Typically covered by the landlord.

• • References: Providing strong references (e.g., bank statements or recommendation letters) can help secure premium rentals.

Simplify Your Journey with Elite Villas Marbella

Navigating property taxes and costs in Marbella requires expertise. At Elite Villas Marbella, we provide personalized guidance to help you make informed decisions. Whether you’re buying, selling, or renting, our team is here to ensure your experience is smooth and seamless.

Let us help you unlock Marbella’s luxury lifestyle with confidence.