TAXES WHEN SELLING A PROPERTY IN SPAIN
- Alexandre Strumeyer
- Nov 29, 2023
- 4 min read
Updated: Jan 25, 2024
When a property is sold in Spain, the seller has to pay the following taxes:
Local PLUSVALIA Tax:
Increase of value on Urban Land (Plusvalía). Paid to Town Hall.
It depends on the years of ownership of the property, the cadastral value, and a coefficient according to the municipality.
Since the 10th of November of 2021 there are 2 methods to calculate this tax: the real or the theoretical one.
The seller chooses the method that gives the least amount to file his Plus Valía Municipal tax return.
Whoever sells a property, at a loss, will be exempt from paying this local PLUSVALIA tax.
It is possible to calculate an estimation of the amount in this website:
Profit tax:
In addition to this local plusvalia tax, all the owners who sell a real estate property will be subject to the payment of a tax for the capital gain obtained from the sale. If they reside in Spain the profit obtained is presented in the income tax return (IRPF) for the year following the sale of the property between April and June.And if they are not Spanish residents, the profit obtained is presented with form 210 within a period of 2 months after having submitted the 3% withholding on the sale price of the property.
The sale of the main residence is free of taxes if the money of the sale is destined to the purchase of another house within a maximum period of two years, but this intention must be notify in the income statement of the year in which you have sold to enjoy that tax benefit. The part of the amount of the sale used for the amortization of the capital of the outstanding mortgage on the day of the sale computes for the calculation of the income tax. The same calculation is applied to other types of situations in which everything that has been received is not reinvested, whether it is the amortization of another type of debt. So it means that the tax exemption for reinvestment will be applied in proportion to the money that has been allocated effectively to the purchase of the new house.
In the declaration of the incomes it will be necessary to declare the patrimonial gain that is obtained by the sale of the property
To calculate this real gain, we must use the difference between the sale of the home and the value for which it was purchased, multiplied by the coefficient (set by the Tax Agency itself) that depends on the year in which it the house was acquired. The purchase value is obtained from the sum of the cost of the house (acquisition value plus all the investments that have been made to improve the real estate) plus the expenses inherent to it, which in turn includes taxes, notary, registry and agency but not the interest paid.
The profits are taxed according to the following sections:
up to 6,000 euros -> 19% rate
Profit between 6,000 and 50,000 euros -> 21% rate
Profit between 50,000 and 200,000 euros -> 23% rate
Profit between 200,000 and 300,000 euros -> 27% rate
Profit over 300,000 euros -> 28% rate
3% Withholding tax:
When a foreigner sell a Spanish property,
the purchaser must retain 3% of the purchase price and cash it at the
Inland Revenue. This payment is done on account of the possible
gain that the vendor has in the sale. If the capital gains tax to pay is
less that the 3% of the price, the vendor is entitled to receive a refund
of the surplus.
Over 65 years
There is an exception to the general norm for people over 65 years of age or people in a situation of great dependency. In these cases the transmission of the habitual residence will always be exempt from taxation. If one of the two vendors is under 65, you will have to pay for half of the gain value.
In the case of non-habitual housing, the earnings obtained after 65 are exempt, with the condition that the income is reinvested in a life annuity, which must have a periodicity less than or equal to the year. You must make this reinvestment in the maximum period of six months and the amount reinvested with the right to exemption may not exceed 240,000 euros
Mortgage cancellation expenses
The mortgage cancelation procedures have a cost of around 500 euros if you do it yourself up to 1000 euros if the bank is in charge of it.
When you sell a house and you are still paying a mortgage for it, the fact of canceling the mortgage will give an additional bank commission payment, as it is included in all the contracts.
If the mortgage has been formalized from the 9th of December of 2007 to the 16th of June of 2019 the commission are the following:
0.5% of the early amortization, if it occurs within the first five years of the operation's life.
0.25% of the early amortization, if it occurs after the fifth year.
If the mortgage has been formalized from to the 16th of June of 2019 the commission are the following:
For a variable rate mortgage, 0.25% of the early amortization, if it occurs within the first three years of the mortgage's life; or 0.15% if it occurs within the first five years.
For a fixed rate mortgage, up to 2% of the early amortization, if it occurs within the first ten years of the mortgage's life, or 1.5% after the first ten years.
Estimated amount of taxes to pay
If you are considering the sale of your property in Marbella or on the Costa del Sol, we are able to provide you with a comprehensive analysis of the taxes that will be applicable to the transaction. Furthermore, we will offer a thorough explanation of the various stages involved in the process of selling a property in Spain.
Should our tailored service proposal pique your interest, we are prepared to provide you with guidance and protect your interests to make this sale a successful experience.
Feel free to reach out to me anytime! I would be more than happy to help you with any questions you may have about selling your home.
Alexandre Strumeyer
+34 622 22 70 78, Tel y Whatsapp.
Real estate agent, EMBASSY Costa del Sol , Marbella
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