The latest municipal Spanish road tax costs for the 2023 fiscal year

Calculating the cost of living in Spain is an important first step for many people thinking about buying a property overseas.

Whether you intend to buy a holiday home, retire in Spain, or come to the Costa Blanca for work reasons, working out your day-to-day budget is essential.

That's why this article provides in-depth and up-to-date information for the 2023 financial year regarding one item that's easy to slip under your budgetary radar - road tax.

Fortunately Spanish road tax rates offer very good value, especially considering the 683,000 miles of well-kept roads and arterial highways that span the country. In Europe, only France has more miles of open road.

How much does it cost to tax a car in Spain?

The cost of road tax in Spain is cheaper than you might be used to, but calculating the road tax payable on a vehicle in Spain is a complicated matter, depending not just on the car, but also upon where the vehicle is taxed.

Unlike many other countries throughout Europe that tax vehicles annually, road tax in Spain (Impuesto Sobre Vehículos de Tracción Mecánica, or simply IVTM) does not take account of vehicle emissions.

Instead, it is calculated according to a standard introduced in the United Kingdom by the RAC in 1910 called fiscal horsepower, and cars are separated into five bands according to power, from the least powerful cars and the cheapest to tax to the most powerful vehicles which cost more to tax annually.

Taxable engine ratings for all cars are determined by the official laboratory appointed by the Spanish Ministry of Industry, and are included with the particulars on the vehicle's Spanish MOT certificate (Tarjeta de Inspección Técnica de Vehículos) box P2.1 "Potencia Fiscal" shown to two decimal places.

Of course, this information will be of little assistance to you if you are thinking of importing your car to Spain, or if you are considering buying a car in Spain and you don't have the MOT certificate to hand. Fortunately, there are websites available online that can help you work out the annual cost of Vehicle Excise Duty for any car.

The Spanish Suma local tax offices offer a website available in English and Spanish languages where you can find the current costs of car tax in your location in Spain, as long as you have the fiscal horsepower figure to hand.

And the popular Spanish motoring website "Diesel y Gasolina", offers an even more comprehensive tool that calculates fiscal horsepower using basic details of any vehicle, and connects with municipal websites to calculate accurate and current road tax costs in your locality.

The cost of Spanish car tax: Ford StreetKa 1.6 Luxury

As an example of car tax costs in Spain, we looked at two of our team members own cars and compared the cost of taxing the cars here in Spain, to the cost of taxing the same cars in the United Kingdom and Germany.

This 2003 Ford StreetKa convertible has a medium-sized petrol engine that meets EURO-4 emission standards producing 189 g/km. With 11.00 fiscal horsepower, the vehicle is rated as band 2 for annual vehicle tax purposes.

According to the Vehicle Certification Agency, the Department responsible for calculating emissions figures and road tax bands, the cost for taxing this car for one year in the UK currently stands at £365.00 annually (about €428.00).

The Bundesministerium der Finanzen in Germany offer an online car tax calculator and the annual cost of taxing this car in the country for one year in 2023 would be €108.00.

By contrast, the cost of taxing this Ford in Spain (in Ciudad Quesada) for one year is €42.60, less than half the cost of taxing the car in Germany, and ten times cheaper than the road fund licence for an equivalent vehicle in the UK.

Car tax in Spain explained: Volkswagen Golf 1.9 TDi Sport

This 2007 Volkswagen Golf has a large turbocharged diesel engine that also meets EURO-4 emission standards producing a somewhat cleaner 143 g/km. The more powerful engine is rated at 13.90 fiscal horsepower pushing the car into the more expensive tax band 3.

The difference in the cost of Spanish road tax for the Volkswagen is somewhat less dramatic, costing £180.00 (€211.00) for a year in the UK, €293.00 annually in Germany, and €106.20 to tax in La Zenia on the Orihuela Costa.

Local Town halls are responsible for the collection of Spanish road taxes at the beginning of May every year, and they are allowed to set their own prices subject to a central government minimum pricing policy.

This means that the cost of taxing your vehicle will change depending on where you live in Spain, but it's worth noting that municipalities don't usually apply an annual increase in road tax costs for cars.

As an example, the table below illustrates the current costs of annual road tax for the Volkswagen Golf with different Councils throughout the Costa Blanca region for the current 2023 fiscal tax year ...

It costs twice as much to tax the Volkswagen Golf in the small Spanish town of Bigastro, as it costs in the northern Costa Blanca municipality of Finestrat.

Residents of Ciudad Quesada also benefit from cheaper rates of car tax, with Rojales Town Hall offering excellent value for money. The Council is amongst the cheapest for road tax in the entire south Costa Blanca region.

Neighbouring residents of the coastal town of Guardamar del Segura, just 7 km to the east of Ciudad Quesada, would be expected to pay €28.77 more to tax the same car in 2023.