Double Taxation: Norwegians Buying Property in Spain

When a Norwegian citizen purchases property in Spain, they may be subject to taxation in both Spain and Norway.

To prevent being taxed twice on the same income or assets, Spain and Norway have signed a Double Taxation Agreement (DTA), which establishes which country has taxing rights over different types of income.

1️⃣ Taxes in Spain

In addition to the taxes and costs associated with the property purchase itself (addressed in a separate article), Norwegian non-residents who own property in Spain are subject to several annual taxes:

• Non-Resident Income Tax (IRNR)

A. Deemed income (non-rented properties)

If the property is not rented or used for business purposes, the Spanish Tax Agency imputes a notional income to the owner based on property ownership alone.

This income is calculated by applying 1.1 % or 2 % to the property’s cadastral value, and the applicable tax rate is 19 % for residents of the European Economic Area (EEA), which includes Norway.

B. Actual rental income

If the property generates income (e.g., through rental), the owner must declare net income (gross income minus deductible expenses such as maintenance, community fees, or loan interest).

For Norwegian residents, as part of the EEA, the applicable tax rate is also 19 %.

• Property Tax (IBI)

The IBI (Impuesto sobre Bienes Inmuebles) is a local municipal tax levied annually on property ownership.

• It is based on the property’s cadastral value set by the Spanish Cadastre.

• The tax rate varies by municipality, generally between 0.4 % and 1.1 % for urban properties.

• It must be paid to the local town hall where the property is located.

• Wealth Tax

Some autonomous regions (such as Catalonia, Valencia, and Andalusia) apply a Wealth Tax to non-residents whose Spanish assets exceed a certain threshold.

• The minimum exemption usually ranges from €500,000 to €700,000, depending on the region.

• Tax rates vary between 0.2 % and 3.5 % on a progressive scale.

• Only the net wealth located in Spain is taxable.

2️⃣ Taxes in Norway

• Declaration of foreign assets

Norway taxes its tax residents on their worldwide income and assets.

Therefore, any income derived from Spanish property (e.g., rental income or capital gains) must also be reported to the Norwegian Tax Administration (Skatteetaten).

• Foreign tax credit

Under the Spain–Norway Double Taxation Agreement, any taxes effectively paid in Spain may be credited against the Norwegian tax due on the same income, thus preventing double taxation.

3️⃣ Spain–Norway Double Taxation Agreement

The DTA between Spain and Norway:

• Prevents the same income from being taxed twice.

• Specifies which country has primary taxing rights over each type of income, such as:

o Rental income and capital gains from Spanish real estate are taxable in Spain.

o These must still be declared in Norway, with a corresponding tax credit.

• Allows exemption or credit mechanisms in Norway for taxes paid in Spain.

4️⃣ Practical Recommendations

1. Properly register the property in Spain and pay IBI and IRNR taxes on time.

2. Declare rental income in Norway and apply the foreign tax credit for Spanish taxes paid.

3. Consult a cross-border tax advisor familiar with both Spanish and Norwegian regulations, particularly before selling or leasing the property.

4. Stay updated on annual tax law changes in both countries, as rates and thresholds may vary.

5️⃣ How MN Legal Firm Can Assist Norwegian Clients

At MN Legal Firm, we specialise in advising Nordic clients — particularly Norwegian residents — on all legal and tax matters related to buying, owning, or selling property in Spain.

Our services include:

• Cross-border tax planning, ensuring full compliance with both Spanish and Norwegian tax authorities.

• Representation before Spanish tax agencies, handling the filing and payment of IRNR, IBI, and Wealth Tax.

• Legal due diligence and purchase assistance, including property verification, contract drafting, and notary coordination.

• Ongoing fiscal management, from annual declarations to eventual sale of the property.

Our multilingual legal team (English, Norwegian, and Spanish) provides clear, transparent, and reliable advice, ensuring that your investment in Spain is both secure and tax-efficient.

To receive personalised assistance, contact MN Legal Firm at www.mnlegalfirm.com or request a consultation with our international tax department.

Conclusion

The Spain–Norway Double Taxation Agreement provides a clear framework to avoid double taxation and ensure fair treatment for Norwegian citizens owning property in Spain.

However, the effective application of its benefits requires professional tax advice and coordinated fiscal planning between both jurisdictions.