💰 Municipal value added tax (Plusvalía Municipal)

In addition to the national capital gains tax, many municipalities also charge Plusvalía (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana).

This tax is levied on the increase in value of the land, not on the building itself.

👉 Calculation is based on:

• The initial and current cadastral value of the land
• The period during which you have owned it
• The municipal rates (these vary by municipality)

📌 Important: If there is no capital gain, you do not have to pay Plusvalía.

👉 Plusvalía may also be due in the event of an inheritance—in that case, the heirs pay.

🧾 National value added tax

The national capital gains tax is calculated on the actual realized profit.

If you did make a profit, it will be taxed at the rates stated above.

If you didn’t make a profit on the sale or transfer, you won’t pay national capital gains tax.

🧾 The 3% withholding tax on sales by non-residents

If you are a non-resident, the buyer is obligated to withhold 3% of the sales price and transfer it to the Spanish tax authorities. This is an advance payment on your final capital gains tax.

The buyer must deposit this amount within one month of signing the deed.

As a seller, you must file your tax return within four months of the sale.

👉 If you have little or no capital gain, you can reclaim the 3% in full or in part.
👉 If you have a higher capital gain, you must pay the difference.

Are you a resident of Spain? Then there’s no 3% withholding tax—in that case, the tax is settled through your annual personal income tax.

🧓 Exceptions and exemptions

There are various exemptions or reductions from capital gains tax:

• ✅ 65+ and resident in Spain: exemption on the sale of your main residence, provided you have lived there for at least the last 3 years.
• 🏡 Reinvestment within 2 years: If you reinvest the proceeds in a new primary residence in Spain, you may be exempt from capital gains tax.
• 🏘️ Certain older homes (1970s–1980s) are subject to specific exemption arrangements.
• 📌 If no added value has been realized, you do not pay any tax.

👉In exceptional situations such as divorce or accident, the 3-year term can be relaxed for those aged 65 and over.

📆 Annual non-resident tax (IRNR)

As a non-resident, you pay a flat-rate tax annually, even if you do not receive any rental income.

• This tax is calculated based on the cadastral value.
• Make sure your tax situation is in order before the sale to avoid problems or delays.

📝 Tips for a worry-free sale

• ✅ Carefully collect all invoices and documents — this can save you thousands of euros.
• 🧮 Request a tax simulation before the sale to determine your net profit.
• 📅 File your tax return on time to avoid missing out on the 3% refund.
• 👩‍💼 Work with a local specialist or real estate agent with experience in Spanish tax law.

✨ Conclusion: prepared sales = gain more

Selling your property in Spain can be financially advantageous, but don’t forget that tax matters play a significant role. By knowing in advance which taxes apply—such as capital gains tax, Plusvalía, the 3% withholding tax, and any exemptions—you’ll avoid unpleasant surprises and maximize your proceeds.

👉 Need guidance on the sale and tax matters?
At Sublicasa, we’ll help you step by step, so you can sell worry-free.