Capital Gains Tax on Property in Spain

Capital gains tax (Impuesto sobre Ganancias Patrimoniales) is levied on the profit you make when selling property in Spain. The rules differ significantly depending on whether you are a Spanish tax resident or a non-resident, so understanding your tax status is the first step in planning for this obligation.

How Capital Gains Are Calculated

The taxable gain is calculated as the difference between the acquisition value and the sale value. The acquisition value includes the original purchase price, plus certain allowable costs such as the property transfer tax (ITP) or VAT paid on purchase, notary and registry fees, legal fees directly related to the purchase, and the cost of any permanent improvements made to the property (not routine maintenance). The sale value is the declared selling price minus certain deductible expenses such as estate agent fees, legal fees, and the plusvalía municipal tax.

Capital Gains Tax Rates for Residents

Spanish tax residents pay capital gains tax on a progressive scale. The first €6,000 of gain is taxed at 19%. Gains from €6,001 to €50,000 are taxed at 21%. Gains from €50,001 to €200,000 are taxed at 23%. Gains from €200,001 to €300,000 are taxed at 27%. Gains exceeding €300,000 are taxed at 28%. These rates apply as of 2025 and may be updated.

Capital Gains Tax for Non-Residents

Non-residents pay a flat rate of 19% on the capital gain if they are EU/EEA residents, or 24% if they are residents of other countries. Importantly, when a non-resident sells property in Spain, the buyer is legally required to withhold 3% of the total sale price and remit it to the tax authorities (Hacienda) as an advance payment toward the seller's capital gains tax liability. If the actual tax owed is less than the 3% retention, the seller can claim a refund.

Exemptions and Reductions

Several exemptions can reduce or eliminate capital gains tax. The most significant is the primary residence exemption for residents: if you sell your primary residence and reinvest the proceeds in a new primary residence within two years, the gain is exempt from tax. Residents over 65 selling their primary residence are fully exempt regardless of reinvestment. Properties acquired before 1995 benefit from transitional reduction coefficients that can significantly reduce the taxable gain on the portion of appreciation that occurred before January 20, 2006. Browse verified properties on Nuevolista and consult a tax advisor to understand the implications before selling.

Plusvalía Municipal

In addition to the national capital gains tax, sellers must pay the plusvalía municipal (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana), a local tax based on the increase in land value during the period of ownership. Following a Constitutional Court ruling, this tax can no longer be charged if no actual gain was made. The calculation method was reformed, and sellers can now choose between the traditional formula and one based on the actual gain.

Planning and Professional Advice

Capital gains tax planning should begin well before you decide to sell. Keeping records of all purchase costs, improvements, and related expenses is essential for minimizing your tax liability. Non-residents should be aware that the 3% retention may tie up funds for months while awaiting a refund. Working with a qualified tax advisor who specializes in Spanish property taxation is strongly recommended. Search apartments for sale on our platform — Nuevolista supports both buyers and sellers through every stage of the property transaction.