Mortgage in Spain for Belgian buyers

The Spain-Belgium Double Tax Convention (signed in 1995, published in Spain’s BOE on 4 July 2003 and amended by protocols published in 2018) governs how income and capital gains are taxed between both countries. For income from a Spanish property, Belgium applies exemption with progression: it does not tax that income again but may count it to set the rate on the rest of your income (Article 23.2.a).

If you remain Belgian tax resident (less than 183 days/year in Spain):

• IRNR (Spanish non-resident tax): 19% on imputed income (1.1% of the cadastral value if it was revised in the previous 10 years, 2% otherwise) for every year the home is not rented (Non-Residents’ Income Tax Law arts. 24.5 and 25.1; IRPF Law art. 85)
• If rented: 19% on net rental income; as an EU resident you can deduct expenses such as mortgage interest, IBI, community fees, insurance and repairs (art. 24.6)
• Salary for work done in Belgium: taxed in Belgium; pensions follow the treaty rule for each type of pension
• Capital gains on sale: Spain taxes 19% and the buyer withholds 3% of the price on account (art. 25.2); Belgium relieves double taxation under the treaty
• No general wealth tax in Belgium — your Spanish property does not create a wealth-tax issue at home (unlike France’s IFI)

If you become Spanish tax resident (>183 days/year):

• Worldwide income subject to Spanish IRPF, on the State scale plus your region’s scale
• Belgian pension reportable in Spain with treaty relief
• Modelo 720 required if your assets abroad exceed €50k in any of its categories
• Special regime for people moving to Spain for work ("Beckham Law", art. 93 of the IRPF Law): 24% on Spanish-source income other than savings up to €600,000 (47% above), for the year you move and the next five, if you were not resident in the previous five years

Action point: if you live in Flanders, Wallonia or Brussels, your regional inheritance tax differs significantly. Coordinate Spanish succession planning with a Belgian notary familiar with your region.

Inheritance planning deserves early attention for Belgian owners of Spanish property: both countries can tax the same estate.

Belgian side:

• Flanders, Wallonia and Brussels-Capital each set their own inheritance tax rates and allowances; the region where the deceased lived applies
• For a Belgian resident, Belgian inheritance tax covers the whole estate, including the Spanish property
• Ask a Belgian notary how the Spanish tax paid on the property is taken into account in the Belgian return

Spanish side:

• Spanish property triggers Spanish ISD (Impuesto de Sucesiones y Donaciones) even if the heirs live abroad
• EU-resident heirs can apply the rules of the autonomous region where the property is (Additional Provision 2 of Law 29/1987)
• Allowances and reductions for direct heirs vary widely between regions; check them before buying

EU Succession Regulation 650/2012: as a Belgian citizen, you can choose Belgian law, the law of your nationality, to govern your whole succession, including the Spanish property, by stating it in your will (art. 22). Without a choice, the law of your habitual residence at death applies (art. 21). The choice of law does not change which country taxes the estate.