Belgian tax residents who own a property in Spain will be faced with three different values: the Belgian cadastral income (KI) assigned to the Spanish property by the FPS Finance, the Spanish valor catastral and the Spanish valor de referencia. Each has its own legal basis, its own competent administrative body and its own tax function. Anyone who confuses them risks submitting an incorrect tax return in Belgium or misjudging the tax burden in Spain.
In this article, we set out the rules for the 2026 tax year (assessment year 2027).
Why choose a Belgian estate agent for a property in Spain?
Since 1 January 2021 (tax year 2022), the Belgian tax authorities have also been determining a cadastral income for property situated abroad. This was prompted by a ruling by the Court of Justice: Belgian property was taxed at a low cadastral income, whilst foreign property was taxed at its actual rental value. This difference constituted a barrier to the free movement of capital.
Who is required to file a tax return? A taxpayer who is the full owner, possessor, leaseholder, holder of a right of superficies or usufructuary. The bare owner is not taxed.
Deadlines and penalties
- Anyone who acquires or disposes of a property abroad (or a right in rem over such a property) must report this of their own accord to the General Administration of Property Documentation (AAPD) within four months. This can be done via MyMinfin.
- The AAPD notifies the determined KI by registered post. An objection to that KI may be lodged within two months of the notification.
- Failure to comply with the obligation to make a voluntary declaration may result in an administrative fine of between €250 and €3,000: €1,000 where the KI is below €745, €2,000 for a KI of between €745 and €2,500, and €3,000 for a KI of €2,500 or more.
How is the Belgian title of ownership of a Spanish property determined?
The KI is the average standard net income for one year, with 1 January 1975 as the reference date. For foreign goods, the AAPD applies a graduated method:
- Comparison with a reference plot. In practice, this is rarely useful for a property in Spain.
- 5.3% of the normal market value as at 1 January 1975
- Calculation based on the current market value. If there is no reference value for 1975, the current normal market value is divided by an adjustment factor published annually (Section 478(2) of the WIB92). This is the method almost always applied to Spanish property.
KI = normal market value / adjustment factor (year of acquisition) * 5.3%
If you purchased a property abroad in 2026, the adjustment factor is 16.694.
The Belgian AI therefore starts from the market value as the taxpayer informs the AAPD, not from the Spanish valor catastral or valor de referencia. Those Spanish figures no longer feature in the Belgian calculations.
From KI to taxable property income
Foreign KIs are subject to the same rules as Belgian KIs. You must state this non-indexed Enter ‘KI’ in box III of the tax return, and in section B, the country and the code for which you are claiming the treaty exemption.
| Purpose of the Spanish property | Taxable income (Section 7 of the WIB92) |
|---|---|
| Not let (second home) | Indexed KI + 40% |
| Let to a natural person for private use | Indexed KI + 40% |
| Let for business use or to a legal entity | Net rent: gross rent − 40% costs (flat-rate costs: max. 2/3 × KI × 5.75), subject to a minimum of the index-linked KI + 40% |
The indexation coefficient for the 2027 tax year is 2.3000; the revaluation coefficient is 5.75. Since the 2022 tax year, Spanish tax (IBI, IRNR) no longer tax-deductible from foreign property income.
Exemption subject to a progression clause. The double taxation agreement between Belgium and Spain grants Spain the right to tax income from immovable property. Belgium exempts this income, but takes it into account when calculating the tax rate on your other income. Without the treaty, the exemption would be limited to 50%.
Calculation example (tax year 2026, assessment year 2027). A flat in Alicante, not let, acquired in 2024 at a normal market value of €250,000.
- KI: €250,000 / 15.726 × 5.3% = €842.55, rounded to €843.
- Indexed KI: €843 × 2.3000 = €1,938.90, rounded to €1,939.
- Taxable property income: €1,939 × 1.4 = €2,714.60.
This amount is exempt, but it increases the average tax rate on your other income. For a taxpayer with a net earned income of approximately €44,000 and a foreign KI of €1,250, the additional tax due to the progressive tax provision can quickly amount to over €600 per year.
In Spain: the cadastral value is not the market value
A persistent misconception is that the Spanish valor catastral corresponds to the market value. That is not correct. Spain has two administrative values, each serving a different purpose.
Cadastral value. An objectively determined administrative value, calculated in accordance with the securities report of the local authority. The Directorate-General for the Land Registry draws up the report, following consultation and usually at the request of the local authority. A general review takes place no sooner than five years and, in any event, no less than ten years after the previous one. The cadastral value must never exceed the market value: a ministerial order stipulates that market reference coefficient of 0.5. In practice, therefore, the cadastral value is well below the market value.
The cadastral value forms the basis for periodic taxes:
- the IBI, the municipal property tax (comparable to the Belgian property tax), at a rate of 0.4% to 1.1% for urban properties;
- the flat-rate income imputation (allocation of property income, comparable to a cadastral income) for properties that are not let and are not the owner’s main residence. For non-residents, the IRNR refers to the same rules; a Belgian tax resident pays 19% IRNR on that flat-rate income;
- the local capital gains tax on land (plusvalía municipal), which is based on the cadastral value of the land.
Find out more about Spanish tax on rental income for non-residents.
New: progressive imputation from 2027. Royal Decree-Law 29/2026 of 6 October 2026 (BOE, 7 October 2026) reforms Article 85 of the LIRPF in two stages.
| An era of tax liability | Rule |
|---|---|
| 2026 | 1.1% of the cadastral value, if this has been revised following a general collective valuation that came into effect on 1 January 2012; otherwise 2% |
| From 2027 | Progressive scale on the sum of the cadastral values of all the taxpayer’s properties concerned (see below) |
| Sum of the cadastral values | Allocation percentage for that tax bracket | Cumulative imputation at the end of the bracket |
|---|---|---|
| up to €100,000 | 1,1% | € 1.100 |
| €100,000 to €500,000 | 1,5% | € 7.100 |
| €500,000 to €1,000,000 | 2% | € 17.100 |
| over €1,000,000 | 3% | — |
The 3% rate therefore does not apply to the entire property, but only to that part of the total cadastral value exceeding €1,000,000. For example: anyone in Spain who owns property with a combined cadastral value of €1,200,000 will have an imputed income of €17,100 + (€200,000 × 3%) = €23,100. A flat with a valor catastral of €80,000 results in €880.
Two points of reservation. RDL 29/2026 must be ratified by the Congreso within thirty days of its publication; the previous RDL 26/2026, which contained the same measures, was not ratified on 2 October 2026. Furthermore, it is not yet clear how the scale, which applies to the total value of all goods, will be applied to non-residents, where declarations are made on a per-item basis (Form 210).
No cadastral value? If, on 31 December, the property does not yet have a cadastral value, or if this has not yet been notified, the calculation is based on 50% of the higher of the value verified by the authorities or the purchase price (in practice, excluding VAT). Until 2026 inclusive, a rate of 1.1% applies to this; from 2027 onwards, this amount will be included in the progressive scale.
Excluded from imputation: the main residence, undeveloped land, property under construction and property which cannot be used for town-planning reasons. The allocation is calculated on a pro rata basis according to the number of days in the tax period.
Reference value. A value which the Dirección General del Catastro has been setting annually since 1 January 2022, based on the prices of all notarial sales within a homogeneous zone, adjusted to take account of the property’s characteristics. A reduction factor must ensure that the value does not exceed the market value. The ‘valor de referencia’ does not affect the ‘valor catastral’ or the IBI. It serves as minimum taxable base in the event of a transfer:
- transfer tax (ITP-AJD) and gift and inheritance tax (ISD): the higher of the declared value, the price or the ‘valor de referencia’;
- capital gains tax (Impuesto sobre el Patrimonio), but only for goods acquired on or after 1 January 2022.
On this basis, the ‘valor de referencia’ also affects any subsequent capital gains tax: the value at which you inherited or were gifted a property becomes your acquisition value. In practice, the ‘valor de referencia’ approximates the market value fairly accurately for older properties. For recent new-builds, it is usually lower than the actual market value. Anyone who disagrees with the value can only challenge it in response to a specific tax assessment under the ITP-AJD or ISD.
| Cadastral value | Reference value | |
|---|---|---|
| Adopted by | Directorate-General for the Land Registry, via the local authority’s valuation committee | Directorate-General for the Land Registry, centralised and annual |
| Basis | Location, construction costs, age, quality, market data | Actual notarial sale prices in the area |
| Ratio to market value | Maximum market value × 0.5 | Market value, reduced by the ‘minoración’ factor |
| Update | Review every 5 to 10 years; annual coefficients set out in the Finance Act | Every year |
| Public | No, protected data | Yes |
| Tax function | IBI, income imputation for IRPF/IRNR, municipal capital gains tax | Minimum tax base for ITP-AJD, ISD and (from 2022) capital gains tax |
| Role in Belgian AI | None (although this was the case under the old system until 2021) | No |
A property under construction or bought off-plan
As long as the property is not completed, it is subject to very little tax in both Belgium and Spain. The turning point in each case is completion or first occupation.
| Phase | Belgium (personal income tax) | Spain (IRNR and IBI) |
|---|---|---|
| Purchase of land or commencement of construction | Registration with the AAPD within four months. | No income imputation: undeveloped land and properties under construction are excluded (Article 85 of the LIRPF). Property tax (IBI) remains payable on the cadastral value of the land if it is situated in an urban area. |
| Off-plan purchase (on paper) | As a general rule, the right of ownership only comes into being upon the execution of the notarial deed of transfer. Until then, there is no obligation to declare or pay tax. | No allocation whilst the property is under construction. |
| Completion or initial commissioning | Notification of the new build to the AAPD, which determines a KI for the building. That KI is included in the return from the date the building is brought into use or let, calculated on a pro rata basis in days. | Allocation from the date of completion, on a pro rata basis. In the absence of a cadastral value, the 50% rule applies (50% of the higher of the assessed value or the purchase price, excluding VAT). |
| Following the allocation of the cadastral value | No influence: the Belgian AI is not dependent on the Spanish value. | From now on, the allocation will be based on the cadastral value; from 2027, it will be based on the progressive scale. |
For the Belgian property valuation of a new-build property, the AAPD divides the normal market value (land and building) by the adjustment factor. Any subsequent major alterations or extensions to a Spanish property must also be declared, as they may lead to a reassessment of the property valuation.
Practical considerations
- You must report any purchase or sale of Spanish property to the AAPD within four months, including acquisitions through inheritance or gift. In the case of joint ownership, each co-owner should submit their own declaration.
- Please check the assessed property value: it is based on the sale value you provided yourself. Any objection must be lodged within two months.
- Enter the KI in box III and, in section B, explicitly request the exemption subject to the progression clause for Spain.
- Use the Spanish ‘valor catastral’ to estimate your annual Spanish tax liabilities (IBI and IRNR). Anyone who owns several properties in Spain should recalculate the IRNR tax from 2027 onwards using the progressive scale, and use the ‘valor de referencia’ when planning a purchase, gift or inheritance.
Confianz advises Belgian owners of Spanish property on planning their purchase, letting, gifting and inheritance. Please feel free to contact us.
