Real Estate Taxation in Spain for French Nationals: Local Taxes, Capital Gains, and Tax Treaty

Published on June 30, 2026 and written by Cyril Jarnias

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Buying, holding, or selling a property in Spain is no trivial matter for a French taxpayer. Between local Spanish taxes, capital gains taxation, wealth tax on both sides of the Pyrenees, and the complex mechanisms of the Franco-Spanish tax treaty, the bill can quickly add up… or, conversely, be significantly optimized if you know the rules.

Tax residency: the starting point of any analysis

Before talking about local taxes, rents, or capital gains, one key question must be answered: are you a tax resident in Spain or France? The answer conditions almost everything else.

The Spanish definition of tax residency

Spanish domestic law (Article 9 of the IRPF Law) sets out three main criteria:

Otherwise, you are considered a non‑resident and then fall under the Non‑Resident Income Tax (IRNR) only on your Spanish-source income.

The French definition and residency conflicts

On the French side (Article 4 B of the CGI), you are a French tax resident if you have:

– your home or main place of stay, or

– your main professional activity, or

– the center of your economic interests.

1. State where you have a permanent home available to you. 2. If you have a home in both states: State where your center of vital interests lies (personal and economic ties). 3. Otherwise: State of habitual abode. 4. As a last resort: nationality or mutual agreement between administrations.

This residency status, once determined under the treaty, sets which country has the primary right to tax your worldwide income, and within what limits the other state may also tax certain income (especially real estate).

Local Spanish taxes: IBI, IRNR, and other holding taxes

For a French owner of a property in Spain, there is first the “usage” taxation: what you pay each year simply for holding the property, even without using it.

IBI: the Spanish equivalent of property tax

IBI (Impuesto sobre Bienes Inmuebles) is the Spanish property tax. It is owed by every property owner, resident or not, and is calculated on the cadastral value (valor catastral), an administrative value generally much lower than the market price (often 30% to 60% of the actual price).

Each municipality sets its own rate within a range established by the state. In practice, this gives:

Element	Indicative Data
Tax base	Cadastral value of the property
Typical urban rate	About 0.4% to 1.1%
Typical rural rate	About 0.3% to 0.9%
Frequency	Annual (bill often in the fall)
Payment	To the town hall / local treasury (often by direct debit)

Differences between municipalities are significant: a large seaside resort or a popular coastal city may have a rate close to 1%, while an inland village will have a 0.4% rate.

Taxation of non-residents: IRNR and “deemed” income

If you are tax resident in France and own a property in Spain, you are in principle a non-resident for Spanish tax purposes. You then fall under IRNR (Impuesto sobre la Renta de No Residentes) for all Spanish-source income, including real estate.

The taxable base is a percentage of the cadastral value:

Cadastral situation of the property	Percentage applied to the cadastral value
Cadastral value revised within the last 10 years	1.1%
Cadastral value not revised within the last 10 years	2%

On this base, an IRNR rate that depends on your country of residence is applied:

Owner’s residence	IRNR rate on the imputed base
EU/EEA resident (including France)	19%
Non-EU/EEA resident	24%

In other words, a French non-resident owner pays each year 19% of 1.1% or 2% of the cadastral value, as a theoretical income, even if the property remains empty. This tax is declared using Form Modelo 210, to be filed no later than December 31 of the year following the tax year.

IRNR on rents: 19% on the net for French residents

When the property is rented, the rents received also fall under IRNR. The treatment again depends on your residence zone.

– Rate: 19%

– Tax base: net income: rents collected minus deductible expenses (IBI, mortgage interest, community fees, insurance, maintenance work, agency fees, etc.), prorated for the rented periods.

For a non‑resident from outside the EU/EEA:

– Rate: 24%

– Tax base: in principle gross income (without deduction of expenses), even though European and Spanish case law is moving toward aligning the right to deductions to avoid discrimination.

Since the reform applicable to 2024 income, non‑resident landlords declare their rents once a year (still via Modelo 210) between January 1 and 20 of the following year. Before this reform, the declaration was quarterly.

Note: if the property is rented only part of the year, the owner must in principle file two Modelo 210 declarations:

– one for the rented period (actual income),

– one for the non‑rented period (theoretical imputed income for the vacant days).

Taxation of real estate capital gains in Spain

The question that haunts many French property owners in Spain remains: how much will I pay if I sell? And how does this combine with French taxation?

The treaty framework: Article 13 of the tax treaty

The Franco-Spanish tax treaty is very clear on the treatment of real estate capital gains. Article 13 §1 provides that:

> gains from the alienation of immovable property are taxable in the state where that property is situated.

Concretely, a capital gain on property located in Spain is taxable in Spain, whether the seller is a French or Spanish resident. But this does not mean it will never be taken into account in France: the treaty allocates the right to tax, then organizes the elimination of double taxation via a system of tax credits or exemptions.

We will come back to that.

How Spain calculates the real estate capital gain

The basic rules are simple:

> Taxable capital gain = Selling price − (Purchase price + acquisition costs + documented improvement works)

In more detail:

– 2. Acquisition value This is the purchase price plus initial costs:

– transfer tax (ITP) or VAT and stamp duty if new purchase,

– notary and registration fees,

– legal fees,

– possibly certain duties or taxes paid at the time of purchase.

3. Improvement works You can add expenses for work that increases the value of the property (extensions, major renovation, energy performance), provided you have invoices. Simple repairs or routine maintenance are not deductible for the capital gain.

The result thus obtained is the gross taxable capital gain in Spain.

Capital gains tax rates: residents vs non-residents

Spain distinguishes between tax residents and non-residents.

For non-residents (including French who do not live fiscally in Spain), the rule is simple:

Non-resident seller situation	IRNR rate on real estate capital gain
EU/EEA resident	19% (single rate)
Non-EU/EEA resident	19% on real estate capital gain (in practice, same rate for real estate sales)

This 19% rate is collected at source through a special mechanism: at the time of the sale deed, the buyer must withhold 3% of the sale price and pay it to the Spanish Treasury (form Modelo 211). The non-resident seller then has three months (after the month of sale) to file his capital gain declaration (Modelo 210):

For Spanish residents, the real estate capital gain falls into the category of “savings income” (rentas del ahorro), with progressivity:

Recent scales evolve but, to give an order of magnitude, they range from 19% to 30%:

Capital gain bracket (resident)	Indicative rate (updated scale)
Up to €6,000	19%
€6,001 to €50,000	21%
€50,001 to €200,000	23%
€200,001 to €300,000	27%
Over €300,000	30%

The tax is declared via the annual income tax return (Form 100) between April and June of the year following the sale, with the possibility of spreading payment (e.g., 60% in June, 40% in November).

Capital gain: favorable special cases (Spanish residents)

If you become a Spanish tax resident, certain exemptions may apply:

These regimes concern only Spanish tax residents. A French non-resident selling his second home on the Costa Blanca, for example, does not benefit from them.

Municipal capital gains tax (Plusvalía Municipal)

In parallel with the state tax, most Spanish municipalities collect a municipal capital gains tax, a local tax based not on the actual gain on the property, but on the theoretical increase in the value of the land since the purchase.

After a ruling by the Constitutional Court, two calculation methods coexist:

– an “objective” method based on the cadastral value of the land multiplied by an official coefficient and a municipal rate;

– a method based on the actual gain on the land (if the land value has decreased, no tax is due).

The town hall calculates both and retains the most favorable to the taxpayer. This tax is separate from the capital gains tax under IRNR or IRPF.

Franco-Spanish tax treaty: who taxes what, and how to avoid double taxation?

Cross-border real estate taxation rests entirely on the Convention between the Kingdom of Spain and the French Republic for the avoidance of double taxation and the prevention of tax evasion and fraud with respect to taxes on income and on capital, signed in 1995.

Taxes covered

For Spain, the treaty covers: the rights of Spanish citizens.

– IRPF (Personal Income Tax),

– IS (Corporate Tax),

– IRNR (Non-Resident Income Tax),

– IP (Wealth Tax, equivalent to the wealth tax),

– and equivalent local taxes on income and wealth.

For France, it covers:

– income tax (IR),

– corporate tax (IS),

– and real estate wealth tax (IFI).

In other words, most real estate taxation (rental income, capital gains, real estate assets) falls within the scope of this treaty.

Rental income: right to tax in the state where the property is located

Article 6 of the treaty provides that income from immovable property is taxable in the state where that property is situated. An apartment in Valencia rented by a French person:

To avoid double taxation, France applies the tax credit method (Article 24-1-a-ii of the treaty): the French tax calculated on this income is offset by a tax credit equal to the corresponding French tax, but capped at the amount of the theoretical Spanish tax.

In practice, since the effective Spanish rate on rent (19% of the net for a French non-resident) is often lower than the overall French tax burden, the mechanism usually results in an effective exemption in France, but the income must still be declared to determine the effective rate applicable to other income.

Real estate capital gains: taxation in the state where the property is located

Article 13 §1 of the treaty follows the standard OECD rule:

– a gain on property located in Spain is taxable in Spain;

– a gain on property located in France is taxable in France.

But the treaty specifies that this does not always give an exclusive right: the state of residence may also take this gain into account, provided it grants a tax credit.

For a French resident selling a house in Spain:

In many situations, the Spanish tax therefore offsets all or part of the income tax component in France. However, the issue of French social contributions (17.2% on real estate capital gains) remains delicate, with the Council of State and the CJEU having already censured some practices and France having reclassified these contributions to maintain them.

Example of eliminated double taxation logic

Imagine a French taxpayer, resident in France, who sells an apartment in Spain with a gain of €100,000.

In Spain (non‑resident EU):

– taxable gain: €100,000,

– IRNR tax = 19% of €100,000 = €19,000,

– withholding of 3% of the price, regularized by a Modelo 210.

In France:

Result: the taxpayer does not pay comparable income tax twice, but remains exposed to French specificities (social contributions, possible surcharge) insofar as the treaty does not always explicitly cover them.

When France exempts and when it credits

The general principle in French treaty law is as follows:

– for certain income, France applies an exemption with progressive rate: the foreign income is not taxed in France, but is taken into account to determine the rate applied to other income;

– for others (including real estate capital gains), it applies the tax credit method: it calculates its own tax, then grants a credit corresponding to the foreign tax, up to the amount of its tax.

In the end, it is rare for a French person to suffer an overall tax burden higher than the heavier of the two systems (French or Spanish) on the “income tax” component. However, one must accept the complexity of dual filings (Form 210 on the Spanish side, Forms 2048‑IMM, 2042, 2047, 2042‑C, or 2074 on the French side).

Wealth tax: real estate assets between French IFI and Spanish IP

Another sensitive topic for French individuals with significant assets: the interplay between the French IFI and the Spanish wealth tax (Impuesto sobre el Patrimonio), supplemented by the solidarity tax on large fortunes.

IFI: the French logic centered on real estate

IFI applies to individuals whose net real estate assets exceed €1.3 million as of January 1. It only covers real estate assets, notably including:

– a 30% discount on the value of the main residence,

– a progressive scale:

Net real estate asset bracket	IFI rate
€0 – €800,000	0%
€800,000 – €1,300,000	0.50%
€1,300,000 – €2,570,000	0.70%
€2,570,000 – €5,000,000	1%
€5,000,000 – €10,000,000	1.25%
Over €10,000,000	1.50%

French residents are taxed on their worldwide real estate assets; non-residents only on their assets located in France.

Spanish wealth tax and solidarity tax

Spain stands out by taxing not only real estate but the entire net wealth (accounts, securities, business assets, works of art, vehicles, etc.), via the Impuesto sobre el Patrimonio (IP), to which is added a solidarity tax on large fortunes (ITSGF).

Main features at the state level:

Autonomous communities may however:

– raise or lower the thresholds,

– modify the scales,

– apply total exemptions (such as Madrid, Andalusia, Murcia) or partial ones.

Added to this is the solidarity tax on large fortunes (ITSGF), applicable to net wealth exceeding €3 million, with a specific scale:

Net wealth bracket (ITSGF)	Rate
€0 – €3,000,000	0%
€3,000,000 – €5,000,000	1.70%
€5,000,000 – €10,000,000	2.10%
Over €10,000,000	3.50%

Amounts paid under the regional IP are deducted from the ITSGF, which acts as a “surcharge” for large fortunes, especially in regions where the IP is reduced (Madrid, Andalusia, Murcia).

Finally, a so-called 60% rule limits the sum of IRPF and IP/ITSGF to 60% of taxable income; beyond that, the wealth tax burden may be reduced (but generally not below 20% of the theoretical amount).

French resident, owner in Spain: who taxes the wealth?

The tax treaty on income and capital also covers wealth taxes (IFI on the French side, IP on the Spanish side). Simplifying:

To avoid double taxation, the treaty provides a tax credit: France includes the Spanish property in the IFI base, then credits against the French IFI due a credit equal to the Spanish tax paid on that same property, up to the portion of IFI corresponding to that asset.

Conversely, a Spanish resident owning real estate in France:

– is subject to IP (and ITSGF if applicable) on his worldwide wealth, including French properties,

– while France may claim IFI on his French properties, with the obligation to grant a Spanish tax credit under the conditions provided.

The concrete result depends greatly on:

– your place of tax residency (France or Spain),

– the structure of your wealth (more or less real estate),

– the Spanish autonomous community of attachment (Madrid vs Catalonia or Valencia, for example),

– and specific exemption rules (main residence, business assets).

Practical impact for a French person: a few typical scenarios

To conclude, it is useful to illustrate how these mechanisms combine in the real life of a French investor or retiree.

Case 1: French resident in France, vacation home in Spain

You live and work in France, but own a second home on the Costa del Sol.

Each year, you are exposed to:

– IBI (local property tax) calculated on the cadastral value;

– IRNR – imputed income: 19% of 1.1% or 2% of the cadastral value (if you do not occupy the property all year);

– possibly IRNR on rents if you occasionally rent it out, at 19% of net income, with deduction of expenses;

– Spanish wealth tax (IP / ITSGF) only if the net value of your Spanish assets exceeds the thresholds (in practice, above €700,000 of net wealth, more or less depending on the region), declared via Modelo 714.

In France:

– you must declare any rents and the value of the property in your IFI assets (above €1.3M of net real estate assets),

– but you benefit from tax credits for the Spanish taxes paid (income and wealth), to avoid excessive double taxation.

When selling:

Case 2: French person becomes Spanish tax resident with assets in France

You decide to settle permanently in Spain (more than 183 days there, center of your economic interests), while keeping a rental apartment in Lyon.

Consequences:

– you become a Spanish tax resident and fall under IRPF on your worldwide income, as well as IP/ITSGF on your worldwide wealth;

– the rents from Lyon are taxable in France (state where the property is located, Article 6) under French law (micro‑foncier or actual),

– but also taken into account in Spain in your IRPF, with a tax credit for the tax paid in France;

– regarding wealth, the Lyon apartment enters the IP/ITSGF base, while France could still require IFI if you remain considered a French resident (dual residence situation to be resolved under the treaty).

When selling the Lyon apartment:

– France retains the right to tax the capital gain under its own rules,

– Spain must, under the treaty, generally exempt this gain, while possibly taking it into account for the effective rate calculation on your other income.

Case 3: Wealthy French person, tax residency in Spain, large real estate portfolio

If you transfer your tax residency to Spain while retaining a significant real estate portfolio, especially in France, several layers of taxation add up:

– IRPF on worldwide income (including French rents) with credit for tax paid abroad,

– IP and ITSGF on worldwide wealth, including French properties, under the national and regional scales, with allowances of €700,000 and €300,000 for the Spanish main residence,

– more or less favorable coordination with French IFI, depending on whether France still considers you a resident and on the interpretation of the treaty.

In regions like Madrid or Andalusia, where the IP is “neutralized” by a 100% rebate, it is mainly the ITSGF that weighs on assets above €3M, which can remain competitive compared to IFI.

In summary: a heavy but manageable tax burden

Real estate taxation in Spain for French people rests on three pillars:

– Local and national Spanish taxes: IBI, IRNR/IRPF (imputed income, rents, capital gains), IP and ITSGF.

– French taxation: income tax, social contributions, IFI, French capital gains, sometimes with coordination gaps (especially on certain social contributions).

– The Franco-Spanish tax treaty: which allocates taxing rights and organizes the elimination of double taxation through tax credit or exemption.

Properly managed, this structure often allows limiting the overall tax burden to the level of the greedier country, rather than adding up both systems. However, one must:

For a French owner or prospective buyer in Spain, the goal is not so much to avoid paying tax – the treaty does not allow that – but to avoid paying twice for the same thing, and to make the best use of favorable local regimes (main residence, senior exemptions, choice of region, asset structuring) while respecting Franco-Spanish rules.