Torremolinos has one of the oldest Israeli communities on the Costa del Sol. Rental property IRNR, Andalusia's near-zero inheritance tax, and capital gains on decades-held properties — expert guidance close to home.
Torremolinos was among the first Spanish resorts to attract international visitors and settlers, and its Israeli community is one of the oldest and most deeply rooted on the Costa del Sol. The town's proximity to Málaga airport — just minutes away — direct access to Israeli charter and scheduled flights, and a compact, walkable seafront make it a perennial favourite for Israeli buyers seeking an affordable alternative to Marbella's luxury market.
Many Israeli owners in Torremolinos use their apartments as holiday homes for part of the year and rent them out — either through agencies or platforms such as Airbnb — during the remainder. This rental activity generates IRNR obligations that are frequently overlooked. At the same time, Torremolinos's position within Andalusia means owners benefit from the region's generous inheritance tax and wealth tax rules — a significant advantage when planning asset transfers to the next generation.
Core Tax Issues
Most Israeli owners in Torremolinos are non-residents, visiting for holidays. However, those spending more than 183 days in Spain trigger full tax residency and worldwide income obligations. Andalusia-region residents benefit from the 100% wealth tax bonificación and 99% inheritance tax bonificación. Non-resident owners still have annual IRNR and quarterly Modelo 210 obligations on rental income.
The 1999 Spain-Israel DTT governs the taxation of Torremolinos rental income and capital gains. Spain has primary taxing rights on Spanish property income. Non-resident Israeli landlords pay IRNR at 19% (EU residents) or 24% (non-EU) on rental income. The DTT ensures Israel credits Spanish tax against any Israeli liability on the same income, preventing double taxation.
Torremolinos sits within Andalusia and applies the region's 7% ITP rate on resale purchases. New builds attract 10% IVA plus 1.2% AJD. Annual IBI is levied by Torremolinos/Málaga municipality. Non-resident owners must file annual IRNR on imputed income if not renting, or quarterly Modelo 210 returns on actual rental income. Capital gains on sale are taxed at 19% IRNR for EU residents.
Torremolinos is within Andalusia's 100% wealth tax bonificación and 99% ISD bonificación territory. Israeli families with Torremolinos apartments benefit from near-zero inheritance tax for direct heirs. Non-resident heirs should ensure the correct Andalusian regional regime is applied at the time of inheritance, as the national-rate default would result in significantly higher tax.
Short-term rental income is the dominant tax issue for Torremolinos's Israeli property owners. Torremolinos is one of the most popular short-term rental locations on the Costa del Sol, and Israeli owners frequently list their apartments on Airbnb or Booking.com. Each rental generates taxable income that must be declared on quarterly Modelo 210 returns. The Agencia Tributaria has increased scrutiny of rental platforms in recent years and has direct access to booking data — non-compliance is increasingly risky.
For EU-resident Israeli owners, IRNR is levied at 19% on net rental income after deducting allowable expenses — management fees, cleaning costs, insurance, IBI, and maintenance attributable to let periods. For non-EU resident Israelis, the rate is 24% on gross rental income with no deductions. This difference can amount to a very significant sum over a Costa del Sol rental season and makes it worthwhile to understand your EU residency status for IRNR purposes before managing your first rental.
Torremolinos's older Israeli community includes many families who purchased apartments decades ago at very low prices. Selling those properties now will trigger IRNR on very large capital gains. Careful calculation of the tax base — acquisition price adjusted for documented improvements and original acquisition taxes — plus ensuring the 3% buyer withholding is correctly credited, is essential. Early professional advice before listing the property for sale is always worthwhile.
Yes, absolutely. Airbnb and Booking.com report rental platform data to Spanish tax authorities. Non-resident Israeli owners must file Modelo 210 quarterly, declaring all rental income received. The Agencia Tributaria has the data and will eventually issue assessments with penalties and interest. Regularising past non-compliance proactively is always less costly than waiting for an inspection.
EU-resident non-residents can deduct expenses directly related to the rental: management fees, cleaning between lets, insurance, IBI, platform commission fees, and repairs and maintenance attributable to the let periods. Mortgage interest is not deductible for non-residents. Non-EU resident Israeli nationals cannot deduct any expenses and pay 24% on gross rental income — making it worthwhile to understand your EU residency status.
Capital gains IRNR is calculated at 19% on the difference between the sale price (net of selling costs) and the acquisition price (purchase price plus documented improvement costs, plus original acquisition taxes and fees). For a property purchased for €60,000 thirty years ago and now sold for €300,000, the taxable gain could be approximately €200,000 (after documented costs), generating IRNR of approximately €38,000. Early advice is essential before listing.
Yes, following ECJ rulings requiring Spain to extend regional bonificaciones to non-residents. Non-resident heirs can access Andalusia's 99% ISD bonificación for Group I/II direct heirs. However, securing the regional regime for non-resident heirs requires specific legal steps at the time of inheritance — the Andalusian regime is not automatically applied. Professional representation at the point of inheritance is essential.
IBI (Impuesto sobre Bienes Inmuebles) is an annual council tax levied by the local municipality on all property owners — both residents and non-residents — based on the cadastral value. ITP (Impuesto sobre Transmisiones Patrimoniales) is a one-off transfer tax paid by the buyer when purchasing a resale property — 7% in Andalusia. IBI is a recurring annual obligation; ITP is paid once on acquisition and does not recur.
Torremolinos occupies a distinctive position in Israel's relationship with the Costa del Sol. While Marbella attracts high-net-worth Israeli buyers and Fuengirola has long been a hub for Israeli families, Torremolinos appeals to a different profile: Israeli retirees drawing Israeli state pensions, mid-market property investors, and hospitality entrepreneurs who have opened Israeli-owned restaurants, beach bars, and holiday rental operations along the Paseo Marítimo. The municipality's international character — with a large LGBT+ community, a developed tourism infrastructure, and relatively affordable property prices by Costa del Sol standards — makes it welcoming to Israelis seeking a lower cost of living than Málaga city or Marbella.
Israeli residents in Torremolinos must be aware that their Spanish tax residency triggers automatic information exchange: Israeli financial institutions report annually to AEAT under the CRS framework since Israel joined in 2018. Account balances, interest income, and securities holdings held at Israeli banks are disclosed to Spanish authorities without any action being taken by the taxpayer. Many Israelis in Torremolinos are unaware of this reporting until they receive an Agencia Tributaria inquiry.
While Torremolinos is primarily a residential and tourism destination rather than a corporate hub, the Beckham Law (Article 93 LIRPF) is still available to Israelis who relocate to the area under an employment contract with a foreign company (for example, working remotely for an Israeli tech firm) or as self-employed individuals with primarily foreign clients. Under this regime, qualifying residents pay a flat 24% rate on Spanish-sourced income up to €600,000 for up to six years, significantly below the combined Andalusian IRPF rate that reaches 47% at higher income levels. Israelis working remotely for employers such as Check Point, Amdocs, or other Israeli corporations may qualify if they establish Spanish residency through their move to Torremolinos.
Israeli nationals who own property in Torremolinos but are not yet Spanish tax residents are subject to the Non-Resident Income Tax (IRNR). Two scenarios arise. First, if the property is rented out, rental income is taxed at 24% on gross receipts (non-EU residents cannot deduct expenses under current rules). Modelo 210 must be filed quarterly — April, July, October, and January — for each rental period. Second, even if the property is not rented out, an annual deemed income charge applies based on 1.1% or 2% of the cadastral value, also reported on Modelo 210.
Once an Israeli becomes a Spanish tax resident in Torremolinos, all worldwide rental income — including from Israeli properties — must be reported on the annual IRPF declaration (Renta), with a credit available under the Spain-Israel Double Taxation Treaty (1999) for taxes paid in Israel.
Practical tip for Torremolinos: Many Israeli holiday rental owners in Torremolinos list properties on Airbnb or Booking.com under Israeli names or accounts. Spanish authorities cross-reference platform data with property ownership records. Ensure your rental income is reported on Modelo 210 (non-resident) or IRPF (resident) to avoid penalty proceedings.
Jacob Salama is a Spanish-registered lawyer (Colegiado nº 11.294 ICAMálaga) specialising in cross-border taxation for Israeli and international residents on the Costa del Sol. Get personalised advice on Torremolinos rental compliance, capital gains, and inheritance planning.
