If you have bought a property in Spain and are thinking of selling it, you should be aware that you will be subject to capital gains tax, el Impuesto sobre el Incremento de Patrimonio or la Ganancia patrimonial. This tax applies to the difference between the purchase price and the resale price of your property.
Tax rates vary according to the tax status of the owner (tax resident or not) and the length of ownership. There are cases of exemption, particularly if you reinvest your money in a principal residence in Spain.
Definition
Capital gains tax in Spain has two components:
- National tax(IRPF for residents/IRNR for non-residents) on capital gains.
- Municipal added value (IIVTNU or plusvalia municipal), calculated on the value of the land on which the property is built.
National tax calculation
Tax base
Net capital gain = selling price - (purchase price + acquisition costs + selling costs + justified work)
Tax rates
| Tax status | Tax brackets |
| Residents | Progressive: 19% (≤6K€), 21% (6-50K€), 23% (50-200K€), 26% (>200K€) |
| Non-residents | Fixed rate: 19% (EU/EEA), 24% (non-EU) |
Calculation of municipal added value (IIVTNU)
A choice of two methods
- Actual method: 60% x national added value.
- Objective method: cadastral value × annual coefficient × municipal rate (generally 0.9% per annum).
Terms of payment
For residents :
- Integration into the annual IRPF declaration.
- Payment by June 30 of the following year.
For non-residents :
- 3% withholding tax deducted by the buyer at the time of sale. The aim is to prevent capital flight.
- Mandatory declaration within 4 months using form 210.
- Adjustment between withholding tax and actual tax.
Municipal capital gains are payable by the seller, and payment terms vary from municipality to municipality (generally 30 days post-sale).
Partial or total exemptions
| Exemptions | Residents | Non-residents |
| Sale of the principal residence of homeowners over the age of 65 | Yes | No |
| Reinvestment in PR within 2 years | Yes | Under certain conditions |
| Acquisition before 1995 | Yes | Yes |
| Capital loss | Tax credit | 3% refund |
Practical advice from Terreta Spain's experts for international investors
- Negotiate the discount coefficient for properties acquired before 2015.
- Keep all invoices (work, notary fees, taxes) for 5 years.
- Choose the best method for calculating municipal added value (run simulations).
- Consider a change of tax residence 2 years before the sale to benefit from tax exemptions.
