Buying Property in Spain as an American: Tax Planning Insights for 2026

Expert insights from José E. Aguilar Shea, Partner at Squire Patton Boggs

Americans are increasingly looking beyond the United States when buying property abroad. From lifestyle relocation and retirement planning to international investment diversification, Spain has become one of the most attractive destinations for US buyers.

In particular, the Costa del Sol, including Marbella, Estepona and Benahavís, continues to attract Americans seeking sunshine, lifestyle and long-term property investment opportunities.

However, purchasing property overseas involves more than choosing the right home. Understanding the tax implications of buying property in Spain as an American is essential, particularly for buyers over 40 who may be planning retirement or managing international financial assets.

To clarify the key issues, we spoke with José E. Aguilar Shea, Partner at Squire Patton Boggs in Madrid. José works closely with international tax specialist Derren Hayden Joseph at HTJ.Tax to advise clients on cross-border tax matters between the United States and Spain.

Expert Contributor

José E. Aguilar Shea
Partner – Squire Patton Boggs, Madrid
Specialist in international tax law and cross-border planning.

Why Americans Are Looking at Marbella

Over the past decade, the Costa del Sol has become increasingly popular with American buyers.

Several factors contribute to this growing interest:

• More than 320 days of sunshine per year
• A well-established international community
• High-quality healthcare and infrastructure
• Direct travel connections via major European hubs
• Strong lifestyle appeal with beaches, golf and gastronomy

For many buyers, Marbella offers a combination of Mediterranean lifestyle and long-term property investment potential that is difficult to replicate in many US coastal markets.

Can Americans Buy Property in Spain?

One of the most common questions from US buyers is whether non-EU citizens can purchase real estate in Spain.

According to José Aguilar Shea, the answer is straightforward.

“Yes, there is no restriction for foreigners, including non-EU citizens, to purchase properties in Spain.”

This means Americans are free to purchase property across Spain, whether as a second home, an investment property, or a future retirement residence.

Spain has long been one of Europe’s most accessible real estate markets for international buyers.

Does Buying Property Make You a Spanish Tax Resident?

Another common misunderstanding is that purchasing property in Spain automatically makes someone a Spanish tax resident.

In reality, Spanish tax residency is determined by several legal criteria.

“Owning a property in Spain cannot merely be a key factor for attracting the tax residency of an individual.”

Under Spanish tax law, an individual may become tax resident if:

• They spend more than 183 days per year in Spain
• Their centre of economic interests is located in Spain
• Their spouse and minor dependent children are tax residents in Spain

These rules apply regardless of nationality. Simply owning property in Spain does not automatically trigger tax residency.

More information on Spanish tax rules can be found on the
Spanish Tax Agency website.

US–Spain Tax Obligations: Understanding Dual Residency

US citizens remain subject to worldwide taxation even when living abroad.

This means that if an American becomes a tax resident in Spain, they may effectively be considered a tax resident in both countries.

José Aguilar Shea explains:

“If a US citizen becomes tax resident in Spain, the individual will become dual tax resident in Spain and the US.”

Fortunately, the US–Spain tax treaty helps reduce the risk of double taxation.

In general terms:

• Spain may allow credits for US taxes paid
• The United States may allow credits for Spanish taxes paid on Spanish-source income

However, cross-border tax situations can vary significantly depending on personal circumstances, so individual advice is always recommended.

Guidance on US international tax obligations is available through the
Internal Revenue Service (IRS).

Taxes When Buying Property in Andalucía

For buyers considering property in Marbella or elsewhere on the Costa del Sol, purchase taxes depend on whether the property is newly built or resale.

Second-hand property

Transfer Tax (ITP) in Andalucía is currently:

7% of the purchase price

New-build property

Newly constructed homes are subject to:

• 10% VAT (IVA)
• 1.2% Stamp duty

Buyers should also budget for additional transaction costs such as legal advice, notary fees and property registration.

US Reporting Requirements When Buying Property Abroad

When transferring funds from the United States to Spain for a property purchase, Americans may also face certain reporting obligations.

Derren Hayden Joseph at HTJ.Tax notes:

“If buying the real estate in Spain through an entity structure, then under Internal Revenue Code Section 6038, certain additional tax filings may be required.”

For individuals purchasing property personally, reporting requirements are usually simpler. However, structures involving companies or trusts should always be reviewed carefully with a tax adviser.

Ongoing Property Taxes for Non-Resident Owners

Even if you do not become a Spanish tax resident, owning property in Spain involves ongoing tax obligations.

Local property tax (IBI)

Each municipality charges an annual property tax known as IBI (Impuesto sobre Bienes Inmuebles).

Compared with many US cities, these local property taxes are often significantly lower.

Non-resident income tax

If the property is rented out:

• Rental income is taxed at 24% on gross income

If the property is not rented:

• Spain applies a “deemed income” tax

This is calculated as:

24% of 2% of the cadastral value

Cadastral values are typically much lower than a property’s true market value.

Wealth Tax in Andalucía

Spain has a wealth tax system, but Andalucía offers generous allowances.

• Wealth up to approximately €3.7 million is effectively exempt
• Tax rates range from 0.2% to 3.5% above that threshold

For non-resident property owners in Andalucía, wealth tax generally only applies if Spanish assets exceed €3.7 million.

Further information on Spanish tax policy can be found on the
Spanish Ministry of Finance website.

Retirement Planning for Americans Moving to Spain

For buyers over 40 considering relocation or retirement, the tax treatment of US retirement accounts becomes particularly important.

According to José Aguilar Shea, the treatment depends on the type of account.

Roth IRAs

Distributions may be treated as investment income in Spain and are typically taxed at 19%-30%.

Traditional IRAs

Distributions may be treated as employment income, which may fall into higher tax brackets.

Additionally, US retirement accounts may not benefit from the same wealth tax exemptions available to certain Spanish pension plans.

This makes early tax planning especially important for Americans relocating to Spain later in life.

Tax Planning Before Moving to Spain

Americans considering becoming tax residents in Spain should ideally review their financial situation beforehand.

José Aguilar Shea notes that it may be worth exploring Spain’s special tax regime for foreign workers, often referred to as the “Beckham Law.”

While not applicable in every case, this regime can provide favourable tax treatment under certain conditions.

Professional tax advice is essential to determine eligibility.

Common Tax Mistakes Americans Make

One of the most frequent mistakes relates to ongoing reporting obligations.

José Aguilar Shea explains:

“Proper tax filing of deemed income for non-residents and, potentially, Wealth Tax exposure.”

Many property owners are unaware that they must file annual non-resident tax returns, even if their property is not rented.

Failure to file can lead to penalties.

When Should Americans Speak to a Cross-Border Tax Specialist?

The best time to consult a professional is before purchasing property or relocating to Spain.

“Always advisable to analyse the tax consequences in advance of buying a property or moving to Spain.”

Early planning can help buyers structure their finances efficiently and avoid unnecessary complications later.

A Final Thought for Americans Considering Marbella

Finally, we asked José Aguilar Shea for advice on buying property in Marbella.

“Great place to live and enjoy life in Andalusia — and keep a tax adviser close.”

FAQ: Buying Property in Spain as an American

Can Americans buy property in Spain?

Yes. Spain places no restrictions on foreigners purchasing property, including non-EU citizens.

Do Americans pay tax in both the US and Spain?

US citizens must continue filing US tax returns even when living abroad. The US–Spain tax treaty helps prevent double taxation by allowing tax credits to be carried over between the two countries.

What taxes do you pay when buying property in Spain?

In Andalucía, buyers typically pay 7% transfer tax on resale properties or 10% VAT on new-build homes, plus legal and registration costs.

Does owning property in Spain make you a resident?

No. Residency depends primarily on how many days you spend in Spain and where your economic interests are located.

Thinking About Buying Property on the Costa del Sol?

The Costa del Sol continues to attract American buyers seeking lifestyle, investment opportunities and long-term relocation options.

If you are considering buying property in Marbella, Estepona or Benahavís, our team at Marbella Homes to Love would be happy to guide you through the process and connect you with trusted legal and tax professionals.

Explore current homes here.

Or contact us to discuss your plans for buying property in Spain.