Property taxes in Spain vs Germany: key differences explained

If you are considering buying a property in Spain, understanding how the tax system compares to Germany is one of the most practical steps you can take. Some taxes work in a similar way in both countries; others are structured quite differently, and knowing where the key differences lie will help you plan your budget with confidence.

This article covers the main taxes you will encounter as a property owner in Spain — when buying, when selling, on an ongoing annual basis, and on inheritance — with a clear comparison to the equivalent German rules at each stage.

Taxes when buying a property

In Germany, the main purchase tax is the Grunderwerbsteuer, which varies by federal state — from 3.5% in Bavaria to 6.5% in states such as North Rhine-Westphalia, Brandenburg, and Schleswig-Holstein. Notary and land registry fees add a further 1.5% to 2%. Since 2020, estate agent fees are split equally between buyer and seller by law.

In Spain, what you pay depends on whether the property is new or second-hand — a distinction that does not exist in the same way in Germany:

• For a resale property, you pay ITP (Impuesto sobre Transmisiones Patrimoniales), Spain's equivalent of the Grunderwerbsteuer. Rates range from 6% in Madrid to 7% in Andalucía and 7.75% in Murcia. Cataluña applies a progressive scale: 10% up to €600,000, 11% from €600,001 to €900,000, 12% from €900,001 to €1,500,000, and 13% above that — making it one of the most expensive regions for resale purchases. The Valencian Community applies 10% as its standard rate, though this is set to reduce to 9% for properties under €1 million from June 2026.
• For a new-build property, ITP does not apply; instead you pay IVA (VAT) at 10% of the purchase price, plus AJD (stamp duty) of between 0.5% and 1.5% depending on the region. Unlike Germany, agent fees in Spain are typically paid by the seller, though buyers should always confirm this in their purchase agreement.

Total purchase costs in Spain — including notary and land registry fees — typically add 10% to 13% on top of the purchase price for resale properties, and 12% to 15% for new builds. Our guide to taxes when buying a property in Spain covers each of these in full detail.

A worked example: €300,000 purchase

To make the comparison concrete, consider a €300,000 property purchase.

Resale property:

• Bavaria (resale): Grunderwerbsteuer at 3.5% = €10,500, plus notary and registry fees of approximately €5,000. Total additional costs: approximately €15,500, or around 5.2% of the purchase price.
• Andalucía (resale): ITP at 7% = €21,000, plus notary and registry fees of approximately €3,500. Total additional costs: approximately €24,500, or around 8.2% of the purchase price.

New build:

• Bavaria (new build): The same Grunderwerbsteuer of 3.5% applies = €10,500, plus notary and registry fees of approximately €5,000. Unlike Spain, Germany does not apply VAT to residential new-build purchases by private buyers. Total additional costs: approximately €15,500, or around 5.2% of the purchase price — identical to a resale purchase.
• Spain (new build): IVA at 10% = €30,000, plus AJD at 1.2% = €3,600, plus notary and registry fees of approximately €3,500. Total additional costs: approximately €37,100, or around 12.4% of the purchase price.

The comparison illustrates two important points. First, in Germany the tax cost of buying is the same whether the property is new or second-hand — the Grunderwerbsteuer applies equally to both. In Spain, the new-build route carries a significantly higher upfront tax burden, which is one of the most important distinctions for German buyers to understand. Second, even a resale purchase in Andalucía costs notably more in tax than the equivalent purchase in Bavaria, though the gap is manageable with careful budgeting.

Annual property taxes

In Germany, the annual Grundsteuer is a local levy calculated using the assessed property value, a federal rate, and a local municipal multiplier. Following the 2025 reform, values have been updated to reflect current market levels. In practice, annual amounts are very low — almost symbolic in many cases — with a typical Berlin apartment generating a bill of around €80 to €150 per year.

In Spain, the equivalent is IBI (Impuesto sobre Bienes Inmuebles), also a municipal tax based on the cadastral value of the property rather than the market value. IBI rates typically range from 0.4% to 1.1% of the cadastral value. Bills are broadly comparable in many cases, though Spain shows greater variation and can be noticeably higher in prime locations such as Marbella or Ibiza. Full details on how IBI is calculated and when it falls due are in our guide to IBI property tax in Spain.

One important difference for non-resident owners is Spain's imputed income tax on unrented properties, filed via Modelo 210. If you own a property in Spain and do not rent it out, you are still required to pay a modest annual tax calculated on a percentage of the cadastral value. Germany has no equivalent to this obligation, and it catches many foreign buyers by surprise.

Taxes when selling a property

Both countries tax capital gains on property, but the rules differ in important ways:

• In Germany, capital gains on property sales are treated as personal income and taxed at the seller's progressive income tax rate of 14% to 45%. The key exemptions are: no tax if you have owned the property for more than ten years, or if it has been your primary residence for the year of the sale and the two preceding years.
• In Spain, the rules depend on whether you are a resident or non-resident at the time of the sale. For tax residents in Spain, capital gains are taxed on a fixed progressive scale: 19% on the first €6,000 of gain, 21% from €6,000 to €50,000, 23% from €50,000 to €200,000, 27% from €200,000 to €300,000, and 30% above €300,000. The full gain is exempt for residents who reinvest the proceeds in another primary residence, and residents over 65 selling their main home are also exempt. For non-residents — which most German buyers will be, at least initially — a flat rate of 19% applies to the entire gain, regardless of its size. To ensure this is collected, the buyer is required to withhold 3% of the total sale price at completion and pay it directly to the Spanish tax authority. The seller then files a return to settle the final liability or reclaim any overpayment.

Spain also applies the Plusvalía Municipal on property sales — a local tax on the increase in the cadastral value of the land over the period of ownership. This is paid by the seller and has no equivalent in Germany. The amount varies considerably by location and years of ownership.

Rental income tax

In Germany, rental income is subject to progressive income tax rates of 14% to 45%, plus a 5.5% solidarity surcharge. Landlords can deduct mortgage interest, maintenance costs, management fees, and depreciation at 2% to 3% per year.

In Spain, rental income for non-residents from EU and EEA countries — which includes German buyers — is taxed at a flat rate of 19%, with deductions permitted for mortgage interest, maintenance, depreciation, and other allowable expenses. In many cases this represents a lower effective tax burden than Germany's progressive scale. Spain's double taxation agreement with Germany ensures that the same income is not taxed twice.

However, as a German resident, you are still required to declare your Spanish rental income in your German tax return, even if you have already paid tax on it in Spain. The double taxation agreement determines how the credit is applied, but the obligation to declare in Germany remains. If you have any doubt about how this applies to your specific situation, taking advice from a tax professional with cross-border experience is strongly recommended.

Inheritance and gift tax

In Germany, inheritance tax (Erbschaftsteuer) applies at rates from 7% to 50%, but the exemptions are generous: a spouse inherits tax-free up to €500,000, and each child is exempt up to €400,000. These allowances reset every ten years.

In Spain, inheritance tax (Impuesto sobre Sucesiones y Donaciones) is managed at regional level, and the differences between regions are significant. Madrid, Andalucía, and the Valencian Community have all introduced near-total relief for direct relatives — spouses, children, and parents — making inheritance between close family members effectively tax-free in practice in those regions. Cataluña, by contrast, applies considerably higher effective rates with lower exemptions and remains one of the stricter regions for inheritance tax in Spain.

Unlike Germany, there is no national exemption threshold that guarantees tax-free inheritance for close relatives — the outcome depends entirely on where in Spain the property is located, and the lack of Germany's generous uniform exemptions is felt most acutely in regions that have not introduced equivalent regional relief.

Understanding Spanish inheritance law and making a will before you purchase is strongly advisable; our guide to Spanish inheritance laws and why you should make a will explains the key points for foreign property owners.

Wealth tax

Germany abolished its net wealth tax in 1997. Spain reintroduced a solidarity wealth tax in 2023, applicable to net assets above €3 million. For most property buyers this threshold is not a concern, but it is worth being aware of if you are purchasing high-value property or hold significant combined assets in Spain.

At a glance: Spain vs Germany property taxes

Key property taxes compared between Germany and Spain. Rates shown are standard rates for 2026; regional variations and individual circumstances may apply. This table is intended as a general guide and does not constitute tax advice.

Are property taxes higher in Germany or Spain?

Spain's property tax system involves more regional variation than Germany's, and the distinction between new-build and resale taxation is something German buyers need to understand from the outset. The annual tax burden is broadly comparable between the two countries, though Spain shows greater variation in prime locations. Rental income tax for EU residents is often lower in Spain. Capital gains tax for non-residents is a transparent flat rate.

The main areas where Spain's costs clearly exceed Germany's are the purchase of new-build property, the lack of Germany's generous inheritance exemptions across most Spanish regions, and the Modelo 210 obligation on unrented properties — none of which are features of the German system. For a broader overview of how the Spanish tax system works for those living or owning property in Spain, our tax guide for expats is a useful next step.