How much capital gains tax do I pay when selling property in Spain?
Capital gains tax (plusvalia nacional and CGT) applies when you sell property in Spain at a profit. For non-residents, the rate is 19 percent for EU/EEA nationals and 24 percent for non-EU nationals. Spanish residents pay between 19 and 28 percent on a sliding scale. There is also a separate local tax called plusvalia municipal.
- 1Non-resident EU/EEA citizens pay 19 percent CGT on property sale gains
- 2Non-residents from outside EU/EEA pay 24 percent
- 3Spanish residents pay 19 to 28 percent on a sliding scale
- 4Allowable deductions include purchase price, taxes paid at purchase, legal fees, and improvement costs
- 5A 3 percent retention is withheld by the buyer at completion as a CGT advance payment for non-residents
Key Takeaways
- Capital gains tax applies to any profit made on the sale of Spanish property
- Residents and non-residents face different rates and filing processes
- The 3 percent retention at completion is a withholding mechanism, not the final tax amount
- Plusvalia municipal is a separate local tax on the increase in land value
- Costs of purchase and improvement are deductible in calculating the gain
When you sell property in Spain at a profit, capital gains tax (Impuesto sobre la Renta de No Residentes for non-residents, or the capital gains element of IRPF for residents) applies to the gain. The gain is calculated as the selling price minus the buying price, adjusted for allowable costs and expenses. For non-resident EU and EEA citizens, the tax rate is 19 percent. For non-residents from outside the EU/EEA, the rate is 24 percent. Spanish tax residents pay at rates between 19 and 28 percent depending on the size of the gain. In addition, a separate local tax called plusvalia municipal is charged by the local council on the increase in land value.
How the gain is calculated
The taxable gain is the selling price minus the acquisition cost. The acquisition cost includes the original purchase price, all taxes paid at purchase (VAT, AJD or ITP), legal fees, notary and registry fees, and the cost of any structural improvements made to the property. If you have made significant improvements, retaining records of these costs reduces your tax liability. The selling costs (estate agent commission, legal fees, notary fee) are also deductible.
Non-resident rates and withholding
For non-resident sellers, the buyer is required by Spanish law to retain 3 percent of the selling price and pay it directly to the Spanish tax authority on the non-resident seller's behalf. This is a withholding advance, not the final tax. The seller's Spanish tax adviser then files the full capital gains tax return within 4 months of the sale, calculates the actual tax due, and either receives a refund of any excess withheld or pays any additional amount owed.
Plusvalia municipal
In addition to the national CGT, the seller must also pay plusvalia municipal, a local tax charged by the municipality on the increase in the official land value (valor catastral) since the last transfer of ownership. The amount depends on the cadastral value of the land, the years of ownership, and the applicable local rate. Your tax adviser calculates this when preparing the sale tax filings.
Resident exemptions
Spanish tax residents who sell their primary residence may be exempt from CGT on the gain if they reinvest the proceeds in another primary residence within 2 years. Residents over 65 who sell their primary home are fully exempt from CGT. Non-residents are not entitled to these exemptions.
Planning your exit strategy
CGT should be factored into your investment calculations from the start. If you buy a 400,000 euro property and sell for 500,000 euros after costs, the 100,000 euro gain attracts 19,000 euros in CGT for an EU non-resident. This reduces the net gain to 81,000 euros before deducting selling costs. Plan your exit price accordingly.
Why This Matters in Costa del Sol
The Costa del Sol has experienced strong capital growth, making CGT planning particularly relevant for investors. A Spanish tax adviser should review your specific situation before you sell, not after.
Common Mistakes to Avoid
A German non-resident sells an apartment bought for 300,000 euros (including 42,000 euros in taxes and fees) for 420,000 euros. The net selling costs are 12,600 euros (3 percent commission). Taxable gain: 420,000 minus 312,600 = 107,400 euros. CGT at 19 percent: 20,406 euros. The buyer withholds 12,600 euros (3 percent of 420,000) at completion; the seller's adviser files the return and pays the remaining 7,806 euros.
Legal Note: Non-residents who fail to file the CGT return after the buyer's 3 percent withholding may face penalties. The 3 percent withheld does not automatically settle the tax; a formal return must be filed.
Tax regulations change regularly. This answer is for general guidance only. Always consult a qualified Spanish tax advisor for advice specific to your situation.
Off-plan property refers to a residential or commercial property that is purchased before construction is complete. The buyer agrees to purchase based on architectural plans, CGIs, show apartments and a specification document rather than a completed building. Payment is typically made in stages tied to construction milestones.
Completion in Spanish property buying refers to the final stage of the purchase process when the title deed (escritura publica) is signed at the Spanish notary. On completion day the buyer pays the outstanding balance of the purchase price, pays applicable taxes (VAT on new builds), signs the title deed in the presence of the notary, and receives the keys to the property. The title deed is then registered at the Land Registry.
The title deed (escritura publica de compraventa) is the notarised legal document that transfers ownership of a Spanish property from the seller (or developer) to the buyer. It is signed in the presence of a Spanish notary on completion day, records the purchase price and all relevant details, and is then registered at the Land Registry to formally establish the buyer as the legal owner.
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