German buyers' guide to buying property on the Costa del Sol — 2026

This guide is written for German nationals buying property on the Costa del Sol in 2026. As EU citizens, German buyers occupy a materially more advantageous position than non-EU purchasers in several important respects: lower Spanish non-resident tax rates, the right to deduct rental expenses, unrestricted freedom of movement, simplified residency registration, and more favourable mortgage terms. This guide explains each of these advantages in detail, alongside the Germany-Spain double taxation treaty (DTA), the German inheritance tax framework, and the practical steps of the buying process.

EU free movement — no Schengen time limits for German buyers

As EU citizens, German nationals have the right to enter, stay, and reside in Spain without restriction. There is no 90-day limit, no visa requirement, and no income threshold to visit Spain for any period. This is a fundamental advantage over non-EU buyers such as British or American purchasers, who are bound by the Schengen 90/180-day rule.

If you plan to spend more than three months continuously in Spain, you are required to register as an EU resident with the Spanish authorities. This is a simple administrative process — significantly simpler than applying for a visa. Within three months of your arrival you register at the Oficina de Extranjería (or a Comisaría de Policía Nacional), presenting your passport or identity card, proof of sufficient financial means (a relatively modest threshold — approximately €7,200 per year for an individual as of 2026), and evidence of health insurance coverage. You receive a Certificado de Registro de Ciudadano de la Unión — your EU registration certificate. After five years of continuous legal residence, permanent residency is automatic.

Buying property in Spain does not automatically confer residency, but the registration process for German nationals is straightforward compared with the visa routes available to non-EU buyers.

The NIE — obtaining your Spanish tax identification number

Every non-Spanish buyer requires an NIE (Número de Identificación de Extranjero) before signing the contrato privado de compraventa (private purchase contract). For German nationals as EU citizens, the NIE is obtained at a Comisaría de Policía Nacional with an extranjería department while in Spain, presenting your German passport or national identity card and a completed Modelo EX-15 form. German citizens can also apply at a Spanish consulate in Germany. The process is typically faster for EU nationals than for non-EU applicants. Allow two to four weeks for the NIE to be issued.

The Germany-Spain double taxation treaty

Germany and Spain signed a new double taxation agreement in 2011, replacing the original 1966 treaty. It has been in force since 2013. The treaty is comprehensive and governs how income and capital gains from Spanish property held by German residents are taxed between the two jurisdictions.

Rental income — under Article 6 of the DTA, rental income from Spanish real estate is taxed exclusively in Spain. As a German resident owning and renting a Spanish property, you declare rental income to the Spanish tax authority () and pay Spanish non-resident income tax (IRNR) there. Germany then exempts that income from German income tax under the Freistellungsmethode (exemption method). However, Germany applies the Progressionsvorbehalt (progression reservation): the Spanish rental income, though exempt from German tax, is included when calculating the rate applicable to your remaining German income. If your Spanish rental income is €15,000 and your German income is €60,000, Germany taxes the €60,000 at the rate applicable to €75,000. The amount of additional German tax this generates depends on your income profile and marginal rate.

Capital gains on property sales — under Article 13(1) of the DTA, gains from the disposal of Spanish real estate are taxed exclusively in Spain. Germany has no taxing right over the gain. The Progressionsvorbehalt may apply here too — the gain is included in the progression calculation affecting German rates even though Germany cannot tax it directly. The German Abgeltungsteuer (flat 26.375% withholding tax on capital income) does not apply to real estate gains — property gains in Germany, where taxable, are always taxed at the marginal income tax rate. In the Spain situation, the DTA grants exclusive rights to Spain regardless.

Spanish non-resident income tax (IRNR) — the EU rate advantage

German nationals who own Spanish property without taking up Spanish tax residency pay IRNR at the EU/EEA rate of 19%. This is materially lower than the 24% rate applied to non-EU residents such as UK nationals post-Brexit. On the same rental income or imputed income base, a German buyer pays roughly 21% less Spanish tax than a comparable British buyer.

Imputed income (renta imputada) — for properties not rented out, the Spanish tax authority calculates a deemed rental income as 1.1% of the property's valor catastral (cadastral value, if reviewed in the last 10 years) or 2% if not. German non-residents pay 19% IRNR on this imputed income. For a typical Costa del Sol apartment with a cadastral value of €150,000, the annual liability is approximately €285–€570. This must be declared annually on Form 210 by 31 December of the following year.

Rental income — with full expense deductions — this is where German buyers have a significant advantage over non-EU buyers. EU/EEA non-residents can deduct allowable expenses from gross rental income before applying the 19% rate. Deductible expenses include mortgage interest, property insurance, IBI (council tax), community fees, maintenance and repair costs, property management fees, and depreciation (typically 3% of the construction value of the property, excluding land). If your Spanish property generates €18,000 in annual rental income and you have €6,000 of allowable expenses, your taxable income is €12,000 and your IRNR liability is €2,280 — compared with €4,320 for a UK non-resident taxed at 24% on the full €18,000 gross. Rental income is now declared annually (not quarterly) on Form 210.

Capital gains when you sell

When a German non-resident sells Spanish property, the capital gain (sale price minus acquisition cost, adjusted for documented improvements and purchase expenses) is taxed at 19% in Spain — the EU non-resident rate. At the point of sale, the buyer is required to withhold 3% of the total sale price and pay it to the on Form 211 within one month. This is an advance on the seller's CGT liability. The seller then files Form 210 within four months of the sale, calculates the actual gain and tax, and receives a refund if more was withheld than owed (or pays any shortfall).

Under the Germany-Spain DTA, Germany has no taxing right over gains from Spanish real estate. The Progressionsvorbehalt may add a modest secondary effect on the German rate applicable to your other income, but you are not taxed twice on the same gain in the way that applies in some other jurisdictions.

One planning consideration: if you have owned the property for more than two years and it is your primary residence in Spain, a complete CGT exemption may apply under Spanish law — speak to a qualified Spanish tax adviser before selling.

Purchase taxes and costs

The purchase tax structure is the same for German nationals as for all other buyers. For new-build properties (first sale), IVA (VAT) is charged at 10% of the purchase price, due at each milestone payment. For resale properties, ITP (Impuesto sobre Transmisiones Patrimoniales) applies at 7% in Andalusia — a flat rate introduced in 2021. AJD (stamp duty) at 1.2% in Andalusia applies to the mortgage deed if financing.

Additional costs: independent legal fees 0.5–1.0% plus IVA; notary and land registry approximately 0.5–1.0%; mortgage arrangement if financing 1.0–2.0% of the loan. Budget 12–14% of the purchase price as total ancillary cost for a financed new-build; 11–12% for a cash purchase.

Financing — mortgage options for German buyers

German nationals purchasing as EU residents generally have access to more favourable Spanish mortgage terms than non-EU buyers. Spanish banks typically offer EU resident non-residents up to 70% loan-to-value against the lower of the purchase price or bank valuation (tasación). Interest rates are broadly comparable with resident rates, without the additional margin typically applied to non-EU borrowers. Required documentation: German passport or identity card, NIE, German income tax returns (Einkommensteuerbescheid) for the last two to three years, bank statements, proof of assets, and the private purchase contract. Allow four to eight weeks from application to formal offer.

German buyers sometimes explore financing the purchase from Germany through their existing German bank relationships. While this is possible, Spanish banks tend to offer competitive terms for Spanish property specifically, and aligning a German loan's drawdown schedule with a Spanish off-plan developer's construction milestone payments can be structurally complex. A Spanish mortgage broker experienced with German buyers can navigate both options.

Currency — no exchange rate risk

Unlike UK or US buyers, German nationals have no currency conversion exposure. The purchase price is in euros, and German incomes and savings are in euros. This eliminates one of the most significant financial risks for non-eurozone buyers: the possibility that the purchase price, in the buyer's home currency, has increased substantially between reservation and completion. For German buyers purchasing off-plan with a 24–36 month construction period, this advantage is particularly valuable.

German inheritance tax (Erbschaftsteuer) and Spanish succession

The Germany-Spain double taxation treaty does not cover inheritance or gift tax. When a German resident inherits Spanish property, both Spanish ISD (Impuesto sobre Sucesiones y Donaciones) and potentially German Erbschaftsteuer may apply to the same asset.

Spanish inheritance tax in Andalusia — Andalusia offers highly favourable treatment for direct family members. Spouses, children, and parents each benefit from a €1,000,000 tax-free allowance per beneficiary, with a 99% reduction applying to the tax quota above that threshold. Following European Court of Justice rulings, non-resident EU citizens such as German nationals are entitled to the same regional allowances as Spanish residents. In practice, the Spanish inheritance liability for a direct-line beneficiary inheriting an Andalusian property is very low.

German Erbschaftsteuer — Germany taxes its residents on worldwide inheritance including foreign assets. Key allowances for 2026: spouse €500,000; children €400,000 per parent; grandchildren €200,000. Rates range from 7% to 50% depending on the amount above the allowance and the relationship class. Where Spanish ISD has been paid, Germany grants credit relief under § 21 ErbStG, reducing the German liability by the Spanish tax paid. The credit is limited to the German tax attributable to the foreign asset, so full double taxation is rare in practice. However, inheritance planning across both jurisdictions — particularly for substantial estates — should be addressed with qualified counsel in both Germany and Spain.

EU Succession Regulation — as both Germany and Spain are EU member states, the EU Succession Regulation (EU No 650/2012) applies to German buyers. By default, the law of your habitual residence at the time of death governs succession. However, in your will you may elect for the law of your nationality (German law) to govern succession instead. A Spanish will drafted by a Spanish notary and registered in Spain's Central Register of Wills ensures seamless administration of the Spanish estate without requiring full German probate proceedings in Spain.

The buying process

The Spanish buying process follows the same four stages for all buyers regardless of nationality.

1. Reservation (reserva) — a deposit of typically €5,000–€15,000 holds the property while legal checks are conducted. Instruct an independent Spanish property lawyer at this stage — not the developer's lawyer or the agent's recommendation. Your lawyer reviews the reservation agreement, verifies the property is free of encumbrances, confirms the developer's building licence status on new-builds, and checks community statutes.

2. Private purchase contract (contrato privado de compraventa) — the binding contract. For off-plan purchases, this sets out payment milestones, completion date, and penalty provisions for both parties. Every deposit payment before completion must be covered by an individual aval bancario (bank guarantee) under Spanish law. Your lawyer confirms the guarantee is in place and in your name.

3. Completion (escritura pública de compraventa) — signed before a Spanish notario. The notary verifies the legality of the transaction, confirms both parties' identities, and oversees title transfer. Your lawyer accompanies you or attends under poder notarial (power of attorney) if you are unable to be present.

4. Registration — your lawyer registers title at the (Land Registry). Until registration is confirmed, you hold the signed escritura as evidence of title. Registration typically takes four to eight weeks.

Running costs

IBI (Impuesto sobre Bienes Inmuebles) — the Spanish council tax equivalent, charged annually by the local municipality based on cadastral value. For a typical Marbella apartment, expect €600–€1,200 per year. Villas pay proportionally more.

Community fees (cuota de comunidad) — paid to the comunidad de propietarios covering shared areas, pool, gardens, lift, and building insurance. These range from €100–€200 per month on a simple urbanización to €600–€1,200 per month on a high-amenity luxury development.

Annual IRNR declaration — even if you do not rent the property, the imputed income declaration on Form 210 must be filed and paid annually. A Spanish gestor (tax administrator) typically handles this for €100–€200 per year.

Engaging the right professional team

A Spanish property lawyer independent of the developer and agent, a qualified German tax adviser familiar with the Germany-Spain DTA and Progressionsvorbehalt implications, and an independent Spanish mortgage broker — these are the three professional relationships worth establishing before you sign anything. Roccabox introduces independent, regulated Spanish property lawyers to clients at no cost, and coordinates with non-resident mortgage brokers for buyers requiring financing. We do not receive referral fees from professional introducees.