Buying a home in Spain is only the first line of the budget. Once the keys are yours, a set of annual taxes and running costs follows every year, and non resident owners face a few obligations that resident owners do not. If you are weighing up a property for sale on the Costa Blanca, it helps to see the full yearly picture before you commit, so the numbers hold up long after completion day.

The taxes that come with ownership

Two separate charges land on non resident owners each year. One is the local council tax on the property itself. The other is a national return that everyone who owns Spanish property without living here must file, whether or not the home earns a penny.

Reality check

• Owning a Spanish home creates a Spanish tax presence, even for a holiday flat used a few weeks a year
• The council does not send the national return, so it is easy to miss unless someone flags it
• Fines and interest for late filing usually cost more than the tax itself
• Joint owners each file their own share, so a couple submits two returns not one

Modelo 210 and the two ways it applies

The national non resident return is the Modelo 210, and it works in one of two ways depending on how you use the home. If you keep the property purely for your own use, you still pay tax on a notional benefit the state assumes you gain from owning it. If you let the property out, you pay on the actual rent instead.

For personal use, the taxable base is 1.1 percent of the cadastral value where the municipality has revised its valuations in the last ten years, or 2 percent where it has not. That base is then taxed at 19 percent for residents of the EU, Iceland, Liechtenstein and Norway, and at 24 percent for everyone else, which since Brexit includes British owners. Rental income is taxed on the same 19 percent or 24 percent split, with EU owners able to deduct running expenses and non EU owners taxed on the gross figure.

Key point

• Own use returns are filed once a year, in arrears, by the end of the year that follows the tax year
• Rental income is grouped and filed annually in the first twenty days of January
• British owners sit in the 24 percent band and cannot deduct expenses against rent
• A low cadastral value keeps the own use bill modest, often a few hundred Euros a year

What you pay when you buy

Purchase taxes are separate from the yearly costs, but they set the tone for the budget so they are worth stating plainly. The rate depends on whether the home is a resale or a brand new build.

• On resale homes the transfer tax dropped to 9 percent in the Comunitat Valenciana from 1 June 2026 on values up to one million Euros, with 11 percent applying above that
• New build purchases carry 10 percent IVA plus stamp duty, with the regional AJD rate reduced from 1.5 percent to 1.4 percent
• Non resident mortgages typically reach 60 to 70 percent of the price or valuation, whichever is lower
• Under Ley 5/2019 the lender pays the AJD stamp duty on the mortgage deed itself, not the buyer

Ongoing running costs

Beyond the tax returns, a handful of predictable bills recur every year. None is large on its own, but together they form the real cost of holding a home on the coast, and they vary a lot between towns.

• IBI, the annual council property tax, runs from roughly 0.4 to 1.1 percent of the cadastral value depending on the municipality
• Basura, the rubbish collection charge, is billed separately by many town halls
• Community fees on an apartment or a gated development, covering pools, gardens, lifts and shared upkeep
• Building and contents insurance, compulsory in practice where a mortgage is in place
• Utility standing charges on water and electricity, which apply even in months the home sits empty

Community life adds one more thing to watch. On top of the regular fee, owners in a community can be asked to fund a derrama, a one off special levy voted through to pay for a larger repair such as a roof, a lift or a repainting programme. These are a normal part of shared ownership, but they can arrive with little warning if a big job has been building up. Reading the recent AGM minutes before you buy shows what the community has already discussed and whether any major work is on the horizon.

Common Mistakes

• Assuming the purchase price is the whole cost and forgetting the yearly returns entirely
• Missing the non resident return because no reminder ever arrives from the council
• Filing one return for a couple when each owner must file for their own share
• Budgeting a British owner at 19 percent when the correct non EU rate is 24 percent
• Ignoring the AGM minutes and being caught out by a derrama voted in months earlier

A Practical Sequence for Staying on Top of Costs

• Step one, note the cadastral value on the IBI bill, since it drives both the council tax and the own use return
• Step two, confirm which non resident rate applies to you, 19 percent inside the EU or 24 percent outside it
• Step three, set aside a rough annual figure for IBI, basura, community fees, insurance and utilities
• Step four, diarise the filing window for the return that fits your use, own use or rental
• Step five, add a small contingency each year so a derrama or a repair does not force a scramble

Handled this way, the yearly cost of a coastal home becomes predictable rather than a series of surprises. The purchase taxes are a one off, the annual bills are modest for most towns, and the paperwork is manageable once you know which return applies.

Where Movr can help

Movr Real Estate works with expat buyers across the south Costa Blanca, and we build the full running cost picture into the search from the start. We can show you the cadastral value and community fee position on any listing we handle, point out where the IBI rate sits in a given town, and flag whether a home is a resale or a new build so the purchase tax is clear before you offer. Tell us your budget and how you plan to use the property, and we will line up homes where the yearly numbers fit as well as the price does.