Many foreigners buy property on the Costa Blanca for vacations: they come for a couple of months a year, and the rest of the time the apartment remains closed. And almost all of them sincerely believe that since the property is not rented out and does not generate income, there is nothing to pay to the government. Except, maybe, utility bills.

This is the most expensive misconception of a Spanish non-resident property owner. Spain thinks differently: even an empty apartment in which you live yourself for two months a year, from the tax authority's point of view, brings you "income" — and you need to pay tax on it. Let's explain in simple terms who pays what and how much, and what silence might lead to.

Who is a "non-resident" in the eyes of the Spanish tax authorities

First, the main definition, because everything depends on it. You are considered a tax resident of Spain if at least one of the following conditions is met: you spend more than 183 days a year in the country, or your center of economic interests is here, or your family permanently lives in Spain.

If none of this applies to you — you are a non-resident. You own property, but your tax home is in another country. It is non-residents who most often get into trouble because they live with the feeling "I’m just here on vacation".

Tax 1. IRNR — for simply owning an apartment

This is the key and most unexpected tax for foreigners — Impuesto sobre la Renta de No Residentes, the income tax for non-residents.

The logic of the Spanish government is this: if you have housing that you use yourself (not rented out), it means you receive "imputed income" — the benefit of living in your own property instead of renting. And this virtual income is taxed even if you haven’t actually earned a single euro.

How it is calculated: the cadastral value of the property (valor catastral, indicated on the IBI receipt) is taken, and 1.1% or 2% is applied depending on how recently the cadastral valuation was revised. The resulting amount is the "imputed income" for the year. Tax is then paid on this amount at the rate:

• 19% — for residents of EU countries, as well as Iceland, Norway, and Liechtenstein;
• 24% — for everyone else, including, for example, UK citizens after Brexit and residents of countries outside the EEA.

In practice, for an average apartment this often amounts to several dozen or a hundred or so euros per year — an affordable amount. The problem is not in the amount, but that many simply do not know about the tax and do not pay it for years.

Tax 2. IRNR from rent — if you do rent out

If the apartment is not empty but rented out (whether long-term or short-term via platforms) — you pay the same IRNR, but now on the actual rental income, not the fictional one.

Here the same distinction is important:

• EU/EEA residents pay 19% and, importantly, can deduct expenses related to the property: mortgage interest, repairs, insurance, IBI, depreciation, management company fees. That is, tax is taken from net profit.
• Non-residents outside the EU pay 24% and can hardly deduct expenses — tax is calculated on gross income. This is a significant difference that citizens of countries outside the EEA should remember.

The rental income declaration is submitted quarterly, not once a year — this is a common mistake.

Tax 3. IBI — local municipal tax

Impuesto sobre Bienes Inmuebles — this is the equivalent of property tax, which all owners pay, residents or not. It goes to the local municipality and is calculated based on the cadastral value; the rate depends on the specific city and usually amounts to fractions of a percent per year.

IBI is usually charged once a year. It is convenient to link it to an automatic payment from your account because the "forgotten" IBI most often turns into debt, which then surfaces — including, as we wrote earlier, during resale, since IBI debts are "attached" to the property itself.

Tax 4. Don't forget about garbage and "imputed income" together

In addition to IBI, the municipality usually charges a separate fee for garbage collection (basura) — small but also mandatory. It is not part of income taxes but is included in the "package" of regular payments that every owner has regardless of whether they live in the apartment or not.

What happens if you just don’t pay

And here is the most important part, which is why it’s worth reading to the end. Many think: "I’m a non-resident, I live in another country, how will they find me?" They will find you — and here’s why this is a bad bet:

Penalties and fines. Interest and surcharges are charged for late filing of declarations. The longer the delay, the more accumulates on top.

The debt is tied to the property. Unpaid municipal taxes like IBI "hang" on the property itself. When you decide to sell the apartment, this debt will come up and will have to be paid from the transaction amount — sometimes together with accumulated penalties.

Problems when selling. When a non-resident sells property, by law the buyer withholds 3% of the price and transfers it directly to the tax authorities — as an advance on possible unpaid obligations of the non-resident seller. If you have accumulated IRNR debts, you will have to deal with them at this moment, in a hurry and not in your favor.

Spain actively exchanges tax information. An automatic exchange of financial information operates between EU countries and many other states. The illusion "I’m not visible here" no longer corresponds to reality.

How to pay calmly and not keep it in your head

Good news: all this setup is scary only in words. In practice, everything is solved once and works for years.

Most non-resident owners simply hire a tax representative (fiscal representative) — this can be a local lawyer or a specialized company (gestoría). The representative files your IRNR declaration once a year, monitors IBI deadlines, reminds you of payments, and ensures that there are no questions for you. This service usually costs modest money annually — incomparable to potential fines and nerves.

Key rules to remember:

• Even if the apartment is empty and does not generate income, the annual IRNR must still be paid.
• The rate depends on whether you are an EU/EEA resident or not: 19% versus 24%.
• Rental income is declared quarterly, "imputed income" from own housing — once a year.
• IBI and basura are paid by all owners; it is convenient to set them up on auto-debit.
• It’s easier to hire a tax representative once than to keep track of deadlines every year.

In short

Owning an apartment by the sea in Spain is a pleasure, not a headache, if you understand the rules from the start. Non-resident taxes are small but mandatory, and the main mistake here is not their size, but sincere ignorance of their existence.

We at Alicante Real Estate help our buyers not only to find and register property but also to organize the entire tax side: we will recommend a reliable tax representative and help you understand exactly what and when you need to pay. Write to us — and owning a home on the Costa Blanca will remain what it should be: a joy.