Selling a property in Spain involves more than agreeing on the final sale price. Understanding the taxes that apply is essential to calculating your true net proceeds and avoiding unexpected costs during completion.
Whether you are a resident or non-resident seller, this guide explains how capital gains tax, the 3% retention, and the municipal plusvalía tax work, together with the exemptions that may reduce your tax liability.
Key takeaway: Non-resident sellers generally pay a flat 19% Capital Gains Tax and have 3% of the sale price withheld at completion as an advance payment. Spanish tax residents are subject to progressive Capital Gains Tax rates but may qualify for significant exemptions depending on their circumstances.
How Is Capital Gains Tax Calculated?
Capital Gains Tax is calculated by comparing the property’s acquisition value with its transfer value.
Your acquisition value includes:
- Original purchase price
- Purchase taxes (ITP or IVA and AJD)
- Notary fees
- Land Registry fees
- Legal fees
- Documented capital improvements supported by official invoices
Your transfer value is generally your selling price minus eligible selling expenses, including:
- Estate agency commission
- Plusvalía municipal (where applicable)
- Other qualifying selling costs
Not every expense related to the property is deductible.
Generally deductible expenses include:
- Structural renovations
- Extensions
- Swimming pools
- Major refurbishments
- Permanent improvements
Items such as routine maintenance, furniture, appliances, decoration, repainting, or mortgage interest do not normally reduce Capital Gains Tax.
Keeping detailed invoices throughout your ownership is one of the best ways to minimise your future tax liability.
What Are the Capital Gains Tax Rates?
The applicable tax rate depends on whether you are a Spanish tax resident.
| Seller | Capital Gains Tax |
|---|---|
| Non-Resident | 19% |
| Resident – First €6,000 | 19% |
| Resident – €6,000–€50,000 | 21% |
| Resident – €50,000–€200,000 | 23% |
| Resident – €200,000–€300,000 | 27% |
| Resident – Above €300,000 | 30% |
What Is the 3% Retention?
When a non-resident sells property in Spain, the buyer is legally required to withhold 3% of the purchase price and pay it directly to the Spanish Tax Agency.
This withholding acts as an advance payment towards the seller’s Capital Gains Tax.
After completion, the seller files Modelo 210 to calculate the final tax liability.
If the actual Capital Gains Tax is lower than the 3% withheld, the seller receives a refund from the Spanish tax authorities.
If the tax due is higher, the seller pays the remaining balance.
Even if the property is sold at a loss, the declaration must still be submitted in order to recover the retained amount.
What Is Plusvalía Municipal?
Plusvalía Municipal (IIVTNU) is a local municipal tax charged on the increase in the value of the land during your ownership.
Since the 2021 reform, the tax can generally be calculated using either:
- The objective calculation method
- The real gain method
The lower result may usually be applied.
Where there has been no increase in land value between purchase and sale, no Plusvalía Municipal is normally payable.
The amount varies significantly depending on the municipality, the cadastral land value, and how long the property has been owned.
Are There Any Tax Exemptions?
Spanish tax residents may benefit from several important exemptions.
These include:
- Reinvesting the proceeds from the sale of a principal residence into another main residence.
- Sellers aged over 65 disposing of their habitual residence.
- Certain over-65 sellers reinvesting qualifying proceeds into a Spanish life annuity (renta vitalicia).
These exemptions generally apply only to Spanish tax residents.
Non-resident sellers continue to pay the standard non-resident Capital Gains Tax regardless of age.
Example of Selling Costs
The example below illustrates a simplified calculation for a non-resident selling a property for €1,000,000.
| Item | Amount |
|---|---|
| Sale Price | €1,000,000 |
| Less Estate Agency Fee | €78,650 |
| Less Acquisition Value | €780,000 |
| Taxable Gain | €141,350 |
| Capital Gains Tax (19%) | €26,857 |
| 3% Retention Paid at Completion | €30,000 |
| Estimated Refund | €3,143 |
Plusvalía Municipal is calculated separately and depends on the applicable municipal rules.
How Can Mojo Help?
Mojo’s Legal Department manages the legal aspects of your property sale, including the 3% retention process during completion.
Mojo’s Finance Department prepares and submits the required Modelo 210 declaration for non-resident sellers, ensuring the correct calculation of Capital Gains Tax and assisting with any refund due from the Spanish Tax Agency.
Frequently Asked Questions
Do I Pay Capital Gains Tax If I Sell at a Loss?
No.
If no taxable capital gain exists, Capital Gains Tax is generally not payable.
However, non-resident sellers must still submit Modelo 210 in order to reclaim the mandatory 3% retention withheld at completion.
Who Pays Plusvalía Municipal?
The seller is generally responsible for paying Plusvalía Municipal.
In transactions involving non-resident sellers, buyers may retain funds during completion to ensure the tax is settled correctly.
Can I Deduct Estate Agency Fees?
Yes.
Estate agency commissions and certain other selling expenses generally reduce the taxable capital gain when properly documented.
Does the Proposed 100% Tax on Non-EU Buyers Affect Sellers?
No.
The proposal relates to certain potential future measures affecting buyers and has not been implemented.
It does not affect the taxation of property sales in Spain.
Related Guides
- What Determines Whether Your Property Sells? The 70–20–10 Rule
- How Is Rental Income Taxed in Spain?
- Legal Department