Expat Taxes: Income and Property Tax in Spain

Published on October 2, 2025 and written by Cyril Jarnias

Spain, with its sunny climate and appealing lifestyle, attracts many French expatriates every year. However, moving to this Mediterranean country requires familiarizing yourself with a new tax system. Whether you’re an employee, retiree, or entrepreneur, understanding the nuances of Spanish taxation is essential to avoid unpleasant surprises and optimize your situation. In this article, we will explore in detail the main aspects of Spanish taxation for expatriates, focusing on income tax and property tax.

The Spanish Tax System: A Labyrinth to Demystify

The Spanish tax system may seem complex at first glance, but it’s built on a few fundamental pillars that every expatriate should know.

Personal Income Tax (IRPF) is the cornerstone of this system. It applies to all worldwide income of Spanish tax residents, whether from salaries, pensions, rental income, or capital gains. Tax rates are progressive and range from 19% to 47% (in 2023), with variations depending on the autonomous regions.

VAT (IVA in Spanish) applies to most goods and services, with a standard rate of 21%. Some products and services benefit from reduced rates of 10% or 4%.

Corporate Tax (IS) concerns businesses and is generally 25% of profits. Reduced rates may apply for small businesses or certain sectors.

Local taxes, such as the Impuesto sobre Bienes Inmuebles (IBI), equivalent to the French property tax, are managed by municipalities and vary by location.

IRPF: The Core of Your Taxation in Spain

The Impuesto sobre la Renta de las Personas Físicas (IRPF) is the equivalent of the French income tax. For expatriates, understanding how it works is essential.

Tax Residence: You are considered a Spanish tax resident if you spend more than 183 days per year in Spain or if your center of economic interests is located there. In this case, you will be taxed on all your worldwide income.

Progressive Scale: IRPF operates with a progressive scale. In 2023, rates range from 19% for the lowest bracket to 47% for the highest incomes. Here’s a simplified overview:

• Up to €12,450: 19%
• From €12,450 to €20,200: 24%
• From €20,200 to €35,200: 30%
• From €35,200 to €60,000: 37%
• Above €300,000: 47%

Regional Specifics: Autonomous communities can slightly adjust these rates, which may lead to variations depending on your place of residence.

Deductions and Allowances: The Spanish system provides various deductions, notably for social security contributions, certain professional expenses, or donations to charitable organizations. There are also specific allowances, for example, for disabled individuals.

Spanish Property Tax: The IBI Not to Overlook

If you become a property owner in Spain, you will be subject to the Impuesto sobre Bienes Inmuebles (IBI), the equivalent of the French property tax. This tax is managed at the municipal level, and its amount can vary significantly from one city to another.

IBI Calculation: The IBI amount is calculated by applying a rate, set by the municipality, to the cadastral value of the property. This value is generally lower than the actual market value.

Variable Rates: IBI rates typically range between 0.4% and 1.1% of the cadastral value but can sometimes reach 1.3% in certain major cities.

Payment: IBI is generally paid once a year, often in the fall, but some municipalities offer installment payments.

Exemptions: Certain properties may benefit from partial or total exemptions, notably listed buildings or certain types of social housing.

Tax Returns: A Schedule to Strictly Follow

Managing your tax obligations in Spain requires good organization and adherence to key dates.

IRPF Declaration: The income declaration campaign in Spain generally takes place between April and June of the year following the income received. For tax residents, the declaration is made via the Modelo 100 form.

Declaration for Non-Residents: If you are not a Spanish tax resident but own property or receive income in Spain, you will need to use Modelo 210 to declare these specific incomes.

IBI Payment: The IBI payment deadline varies by municipality but is generally between September and November.

Additional Obligations: Don’t forget to declare your foreign bank accounts (Modelo 720) if their cumulative value exceeds €50,000.

Expert Tips to Optimize Your Expatriate Taxation in Spain

Navigating the Spanish tax system can be complex, but with the right advice, you can optimize your situation and avoid common pitfalls.

1. Anticipate Your Tax Status: Before your move, accurately assess your future tax situation in Spain. Depending on your profile (employee, retiree, entrepreneur), the implications can be very different.

2. Master the Franco-Spanish Tax Treaty: This treaty helps avoid double taxation. Make sure you understand how it applies to your situation, especially for retirement pensions or real estate income.

3. Explore Special Regimes: The “impatriate” regime can be very advantageous for certain profiles. Inquire about the eligibility conditions and the benefits it can offer you.

4. Optimize Your Investments: Certain savings or investment products benefit from tax advantages in Spain. Consider diversifying your assets accordingly.

5. Stay Informed of Changes: Tax legislation evolves regularly. Keep up to date with changes that could impact your situation.

Expatriating to Spain offers many opportunities but requires a good understanding of the local tax system. By mastering the principles of IRPF, IBI, and other tax obligations, you can fully enjoy your new life under the Spanish sun without tax surprises. Remember that each situation is unique and rules can change. Stay vigilant and don’t hesitate to seek professional guidance to optimize your tax situation legally.