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

This guide is written for Italian nationals buying property on the Costa del Sol in 2026. Italian buyers share with other EU nationals the advantages of full freedom of movement, the 19% IRNR rate with expense deductions, and no currency risk from using the euro. The distinctive Italian advantage, however, is the Italian capital gains exemption: if a property is held for five years or more, any capital gain realised on the sale is completely exempt from Italian tax. Combined with Spain's 19% rate, this creates a clear and favourable long-term tax position for Italian investors. This guide sets out the full framework.

EU free movement — no restrictions for Italian nationals

Italian nationals have full EU freedom of movement in Spain. There is no 90-day limit, no visa requirement, and no income threshold. If staying more than three months continuously, register as an EU resident at the Oficina de Extranjería. After five years of continuous legal residence, permanent residency follows automatically.

The NIE

An NIE (Número de Identificación de Extranjero) is required before signing the private purchase contract. Italian nationals obtain this in Spain or at the Spanish consulate in Italy. Allow two to four weeks.

The Italy-Spain double taxation treaty

Italy and Spain have a comprehensive double taxation convention that prevents the same income from being taxed in full by both countries. The treaty uses the credit method: Spain taxes Spanish-source income, and Italy taxes the same as part of worldwide income (reddito mondiale) but grants a credit for the foreign tax paid, calculated against the Italian tax attributable to that foreign income.

Rental income — rental income from Spanish property is taxed in Spain at 19% IRNR for EU non-residents on net income after allowable expenses. Italian tax residents must also declare this rental income in their Italian income tax return (dichiarazione dei redditi). Italian income tax (IRPEF) on rental income can be progressive up to 43% plus regional and municipal surcharges. The Italian tax credit for the Spanish IRNR paid (19%) reduces the Italian IRPEF liability. The net Italian exposure depends on the taxpayer's overall income and IRPEF bracket.

Capital gains — discussed in the section below, as the five-year exemption is the defining element.

The five-year Italian CGT exemption — the standout advantage

Italian law provides a complete exemption from Italian capital gains tax (plusvalenza) on the sale of a property that has been owned for five years or more. This exemption applies to foreign real estate held by Italian tax residents just as it applies to Italian property. If you own a Costa del Sol apartment for five or more years and then sell it, the gain is not subject to Italian CGT regardless of its size.

For properties sold within five years of purchase, Italian CGT applies at a flat rate of 26% on the gain, with a credit for the Spanish CGT (19%) already paid. The net Italian exposure in that case is approximately 7% of the gain, in addition to the Spanish 19%. The planning implication is straightforward: holding the property for the five-year period before selling eliminates the Italian CGT dimension entirely, leaving only the Spanish 19% obligation.

This five-year exemption makes Spanish property particularly attractive to Italian buyers compared with jurisdictions where capital gains obligations run indefinitely. Italian investors who treat Costa del Sol property as a medium-term hold (five-plus years) have a cleaner exit tax position than most other nationalities.

Spanish IRNR — the annual obligations

As EU residents, Italian non-residents pay IRNR at 19%. For properties not rented out, imputed income of 1.1% or 2% of cadastral value is taxed at 19%, declared on Form 210 annually. For rented properties, allowable expenses are deductible before the 19% rate applies to net income. On sale, the buyer withholds 3% (Form 211) and the seller files Form 210 within four months.

Purchase taxes and costs

New-build: IVA at 10%. Resale: ITP in Andalusia at 7%. AJD at 1.2% on mortgage deed. Legal fees 0.5–1.0% plus IVA. Notary and registry approximately 0.5–1.0%. Mortgage arrangement if financing 1.0–2.0%. Budget 12–14% as total ancillary cost for a financed new-build.

Currency — no exchange rate risk

Italy uses the euro. Italian buyers have no currency conversion exposure on Costa del Sol property. All purchase costs, taxes, and eventual sale proceeds are denominated in euros.

Italian inheritance tax (imposta di successione)

There is no bilateral Italy-Spain inheritance tax treaty. Italian residents inheriting Spanish property are subject to both Spanish ISD and Italian imposta di successione on the same asset, with an Italian domestic credit available for foreign taxes paid.

Italian imposta di successione rates for 2026 are notably low by European standards for direct family: spouses and direct descendants pay 4% on assets exceeding €1,000,000 per beneficiary. Siblings pay 6% on assets above €100,000 per beneficiary. Other relatives pay 6% with no threshold. Unrelated parties pay 8%. From January 2026, inheritance and gift tax allowances are calculated separately — gifts made during lifetime no longer reduce the inheritance allowance.

In Andalusia, Spanish ISD for direct family is very low: €1,000,000 allowance per beneficiary plus 99% reduction. The Italian domestic credit for Spanish ISD paid reduces the Italian exposure. In combination, the total inheritance burden for Italian families inheriting a Costa del Sol property directly is modest — typically around 4% for children above the €1M Italian threshold, reduced further by the Spanish credit.

A Spanish will (testamento) is recommended. EU Succession Regulation 650/2012 applies — Italian nationals may elect Italian law to govern succession. Coordinate with an Italian notary and a Spanish notary or lawyer.

The buying process

1. Reservation (reserva) — €5,000–€15,000. Retain an independent Spanish property lawyer.

2. Private purchase contract — binding. Off-plan: all stage payments covered by individual aval bancario. Your lawyer confirms before you sign.

3. Completion (escritura pública) — before a Spanish notario. Your lawyer attends or holds power of attorney.

4. Registration — . Four to eight weeks.

Running costs

IBI — €600–€1,200 per year for a standard Marbella apartment. Community fees — €100–€200 per month on a standard urbanisation. Annual IRNR declaration on Form 210 — a Spanish gestor for €100–€200 per year.