Purchase & Sale Values
The buyer withholds 3% at completion. Within 3 months, your gestor files Modelo 210 to settle or reclaim any overpaid tax from Hacienda.
How Does Capital Gains Tax Work When Selling Property in Spain?
When selling a property in Spain, sellers encounter two separate taxes: national Capital Gains Tax (Ganancia Patrimonial administered by the Agencia Tributaria) and the municipal land value tax (Plusvalía Municipal levied by the local Town Hall).
1. Calculating the Net Capital Gain
Taxable gain is not simply the sale price minus the purchase price. Spanish tax law allows significant deductions to reduce your tax exposure legally:
- Deductible acquisition costs: Transfer tax (10% ITP or VAT) paid at purchase, alongside notary, lawyer, and land registry fees, increase your official base value.
- Capital Improvements (Reformas): Structural investments such as adding a swimming pool, extension, double glazing, or a new kitchen are added to your cost base if supported by official invoices with VAT.
- Deductible disposal expenses: Estate agency commissions, legal fees, and mandatory Energy Performance Certificates (CEE) are deducted from the gross sale price.
2. The Mandatory 3% Non-Resident Withholding (Modelo 211 & 210)
To ensure foreign property owners settle their fiscal obligations, Spanish law obliges the buyer to withhold 3% of the gross sale price at the notary. The buyer pays this to Hacienda within 30 days via Modelo 211. Within 3 months of completion, your tax gestor files Modelo 210 to finalize accounts. If your actual gain is lower than the 3% deposit (or if you made a capital loss), Hacienda refunds the difference.
Frequently Asked Questions about Selling Property in Spain
Are seniors aged 65 and over exempt from capital gains tax in Spain?
Yes, but exclusively if you are an official Spanish tax resident and the property was your primary permanent residence (vivienda habitual) for at least 3 years. Non-residents cannot claim this 100% exemption.
What happens if I sell my Spanish property at a loss?
If your net sale price is lower than your total acquisition base, your capital gains tax is €0. Under reformed municipal law, no Plusvalía tax is owed on a financial loss. You can reclaim 100% of the 3% withheld at the notary by submitting Modelo 210.
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