TAXES GUIDES
SELLING TAXES GUIDE
Understanding selling taxes in Altea
Understanding selling taxes in Altea
SALES TAXES
Which taxes must property owners pay when selling their home in Spain?
All property owners who sell their home in Spain are required to pay taxes, regardless of whether they are Spanish or foreign nationals, and whether they are tax residents or non-residents in Spain.
To determine which taxes a property owner must pay when selling a home in Spain, and how much must be paid, the first key factor to consider is whether the seller is a tax resident or a non-resident in Spain for tax purposes.
This distinction between resident and non-resident is purely fiscal in nature and is entirely unrelated to whether the individual holds a residence permit in Spain.
These are the taxes and key aspects that a property owner must take into account when selling a home in Spain:
INCOME TAX (IRPF – IRNR)
This tax applies to capital gains obtained from the sale of real estate in Spain.
Capital gain is calculated as the difference between the sale price and the acquisition value of the property. The acquisition value is the original purchase price plus expenses such as notary and Land Registry fees, taxes paid at the time of purchase (ITP or VAT), and duly documented improvement costs. Personal expenses of the seller or costs that are not clearly supported by documentation cannot be deducted.
For tax residents in Spain, the gain obtained from the sale of a property is taxed under IRPF within the savings tax base, at progressive rates.
At present, the applicable rates are as follows:
• 19% → up to €6,000
• 21% → from €6,000 to €50,000
• 23% → from €50,000 to €200,000
• 27% → from €200,000 to €300,000
• 28% → over €300,000
These percentages are applied progressively, not as a single flat rate on the entire gain.
For example: if the capital gain amounts to €100,000, the tax payable would be €1,140 on the first €6,000, plus €9,240 on the portion between €6,000 and €50,000, plus €11,500 on the portion between €50,000 and €100,000, resulting in a total of €21,880.
When selling a home, a resident may be totally or partially exempt from tax in several cases:
For non-residents, the capital gain is taxed under IRNR at the general rate, which may vary depending on current legislation, but is generally 19% for residents of European Union or EEA countries, and 24% if the seller is resident outside the EU/EEA.
This percentage is applied to the net gain after deducting from the sale price the acquisition price plus allowable expenses.
The buyer of a property from a non-resident is legally required to withhold 3% of the purchase price and pay it to the Spanish Tax Authorities.
This amount paid by the buyer is not a final tax, but an advance payment on account of the tax owed by the seller on the capital gain. The amount withheld serves as a tax credit when the IRNR is filed. If the 3% withheld exceeds the final tax liability, the seller may request a refund of the excess.
The 3% withheld by the buyer must be paid to the Tax Authorities within 30 days from the signing of the public deed of sale.
The non-resident seller must file the IRNR return (Form 210) within 30 calendar days following the end of the month in which the transfer took place, in order to calculate the actual gain and determine whether any additional tax is due or whether a refund is applicable if the withholding exceeded the final tax amount.
What happens if the buyer does not pay the 3% withholding?
In such a case, the acquired property will be subject to the payment of the tax, and the Land Registry will record this in the registration of the property in favour of the buyer. This annotation may only be cancelled by lapse of time, by presenting proof of payment, or by an administrative certificate confirming non-liability or prescription of the debt.
ATTENTION!
The Spanish Tax Authorities do not send non-resident taxpayers any communication, payment notice, or tax assessment regarding Non-Resident Income Tax. Non-resident individuals (or their representatives) are therefore responsible for calculating the tax, completing the corresponding self-assessment form, and arranging payment.
Property owners who have not filed Non-Resident Income Tax returns are strongly advised to regularise their tax situation in order to avoid significant financial penalties.
The official name of this tax is the Tax on the Increase in Value of Urban Land (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana).
This tax depends on the increase in the value of the land and on the tax rate set by the Town Hall where the property is located. It must be paid whenever a property is transferred, whether by sale, inheritance, exchange, or donation.
Town Halls traditionally charged this tax regardless of whether there had been an actual increase in value. However, the Constitutional Court has recently declared this tax unconstitutional in cases where there has been no real increase in value, that is, where there is no difference between the purchase price and the sale price.
The following factors are taken into account:
In the case of inheritance or donation: the heir or the recipient of the property.
In the case of a sale: the seller. However, if the seller is a non-resident in Spain, the buyer is legally obliged to pay this tax, although the seller must reimburse the amount. In practice, when properly advised, the buyer will usually retain part of the purchase price in order to pay this tax and prevent the non-resident seller from leaving Spain without settling the liability.
You now know which different taxes must be paid in Spain by property owners — whether Spanish or foreign, resident or non-resident — when selling their home. You are also aware of the differences between being a resident or non-resident in terms of which taxes apply, how much must be paid, and when payment is due.
Nevertheless, tax matters are complex and subject to change. For this reason, we strongly recommend that when buying or selling a property you rely on the assistance of true professionals with the necessary training and experience in all matters relating to real estate and taxation, rather than entrusting your affairs to a simple “house seller”.
At ALTEAINVEST, we possess the necessary — and verifiable — qualifications and more than 45 years of experience, guaranteeing effective assistance in planning your tax position in the most efficient way possible, legally reducing your tax burden and avoiding potential penalties.
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