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Glossary of Spanish property investment

The words you will come across when buying to let in Spain, explained in one sentence.

NIE

Número de Identidad de Extranjero: the tax number every foreigner needs to buy, sell or pay taxes in Spain.

ITP

Impuesto de Transmisiones Patrimoniales: tax paid by the buyer of a resale home. The rate is set by each region (roughly 6–13%).

IVA

Spanish VAT. A new home sold by a developer carries 10% VAT instead of ITP.

AJD

Actos Jurídicos Documentados: stamp duty on notarial deeds (new-build purchase, mortgage), roughly 0.4–1.5% depending on the region.

IBI

Impuesto sobre Bienes Inmuebles: annual property tax paid to the town hall, based on the cadastral value.

IRNR

Impuesto sobre la Renta de No Residentes: non-resident income tax. 19% of net income for EU/EEA residents, 24% of gross rent for others.

IRPF

Progressive income tax for Spanish tax residents. Rent from a tenant’s main home gets a 50% reduction (up to 90% under conditions).

Modelo 210

The IRNR return: rental income, deemed income on an empty home and capital gains of non-residents.

Renta imputada

Deemed income taxed when a non-resident owns a home that is not let: 1.1% or 2% of the cadastral value per year.

Valor catastral

Administrative value set by the land registry office, usually below market price. Basis for IBI and deemed income.

Nota simple

Land registry extract: owner, size, mortgages and charges on the property.

Contrato de arras

Reservation contract signed before completion, with a deposit (often 10% of the price).

Comunidad de propietarios

The building’s owners’ association; its monthly fees are paid by the owner and deductible from rent.

Fianza

Tenant’s security deposit: one month’s rent for a home, lodged with the regional body.

IRAV

Índice de Referencia para la Actualización de Arrendamientos de Vivienda: the annual cap on rent increases, published monthly by INE.

Zona tensionada

Stressed market area declared by a region: rents on new contracts are capped (applied notably in Catalonia).

Gran tenedor

Large landlord: 10 or more homes (or 5 in a stressed area if the region decides). Subject to stricter rules.

Cédula de habitabilidad

Certificate of habitability required in some regions (including Catalonia and the Valencian Community) to let a home.

Certificado energético

Energy performance certificate (A to G), required to sell or let.

Plusvalía municipal

Municipal tax on the increase in land value, paid by the seller on resale.

Retención del 3 %

When a non-resident sells, the buyer withholds 3% of the price and pays it to the tax office against the capital gains tax.

Rentabilidad bruta

Gross yield: annual rent divided by the purchase price.

Rentabilidad neta

Net yield: rent minus fees, IBI and vacancy, divided by the price (before or after tax depending on the definition).

Euríbor

Euro interbank rate used as the benchmark for variable-rate mortgages in Spain.