Transfer taxes when selling
Taxes are due on the sale of real estate in Spain. We provide a brief overview of these two taxes below:
Municipal capital gains tax, also called the “plusvalía municipal”. This is a tax that will be levied by the municipality where the property is located. We will calculate this for you in advance so that you have an idea of the cost. This is based on the value of the land and the number of years you have owned it.
National capital gains tax, also called the 3% tax. When you sell the property, you will pay a tax on the NET capital gain that you have realised. This means that the difference between:
- The purchase price that you paid at the time, plus all legal costs associated with your purchase, such as notary fees, registration fees, transfer tax and your supervision costs by a consultant/solicitor like us.
- The sales price you now receive minus all legal costs to be deducted that are associated with the sale, such as our invoice, the energy performance certificate, the municipal capital gains tax described above and the invoice from the broker.
On this difference, if it is positive (so you have made a profit on the sale) you will be taxed at the rate of 19%. At the notary, however, you will already have to pay 3% of the total sale price to the tax authorities. The difference between the two will have to be made up. In other words:
- Either you have paid too much tax at the moment of the sale (the 3% of the total sale price is higher than what you should have paid) and then we will make sure that the Spanish tax authorities refund the overpaid amount to you;
- Or you have paid too little at the notary (the 3% that was withheld at the sale is not enough) and so we will have to submit an extra declaration and still have to pay this difference. ATTENTION!! You can only claim a refund of the overpaid tax if you have correctly submitted and paid your annual non-resident tax! The tax authorities will check this before proceeding with any refund of your taxes.
Don’t let this discourage you, we do a calculation in advance so that you know what to expect and how much (or how little) you have to pay on the sale of your property at the Spanish tax authorities.
Transfer tax in Spain: finally
It goes without saying that if we do the full conveyancing during your buying or selling process, we will calculate these taxes for you in advance and inform you. And of course submit and settle with the competent authorities.
We also offer to do the necessary for you, after you have already sold and only want to use our services for the submission of the national capital gains tax. As explained earlier, it must be filed and settled within 3 months of the sale. We are happy to assist you with this!