Definition

In Spanish, real estate capital gains are called "ganancia patrimonial".

It is a tax paid by the seller or the buyer (in the case of a non-resident seller) who makes a profit from the sale of a property.

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This capital gain can result from various transactions, such as the sale of a property, a donation, or the transfer of an asset.

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Note: it must be distinguished from the "plusvalía municipal", a local tax that taxes the increase in the value of urban land during a real estate transaction.

Calculating Real Estate Capital Gains

To determine the amount of capital gain, the following formula must be used:

Capital Gain or Loss = Sale Value – Purchase Value

• Purchase Value: This is the sum of the property price (appearing on the public deed) plus all expenses and taxes related to the purchase (appraisal fees, notary fees, lawyer fees, real estate agency fees, renovation work, depreciation applied in the case of a rented property, property taxes, etc.).
• Sale Value: This is the sum of the selling price plus all expenses related to the sale.

Taxation of Real Estate Capital Gains in Spain

If you are planning to sell a property in Spain, here is what you can expect in terms of taxation.

What should you know about this tax?

The capital gains tax rate is progressive and varies according to several factors:

• Depending on tax residence.
• Depending on the amount of the capital gain.

As a reminder, a tax resident in Spain is considered to be someone who:

• Lives in Spain for a total of 183 days per year.
• Has their main personal or professional interests located in Spain.

Capital Gains Tax for Spanish Tax Residents

The capital gain must be reported on the Personal Income Tax (IRPF) declaration. To learn more about this tax, read our practical guide on IRPF.

Here is the 2023 scale:

• For the first €6,000 of gain: 19%
• €6,000 – €50,000: 21%
• €50,000 – €200,000: 23%
• €200,000 – €300,000: 27%
• Over €300,000: 28%

Capital Gains Tax for Non-Residents

It is 19% for residents of the European Union, who must declare it under the Non-Resident Income Tax.

To learn more about your tax obligations as a non-resident, consult our article: "The 5 Essential Taxes for Non-Residents".

We draw your attention to the payment method: to combat capital flight, there is a retention system in Spain at the time of signing before the notary if the seller is a non-resident. 3% of the tax is withheld from the buyer. This sum must be paid to the Agencia Tributaria within one month. The seller must then pay the remaining 16% within three months.

Exemption Cases

For the Main Residence:
In the case of the sale of the main residence, gains are exempt from tax if they are reinvested in another main residence within two years.

For those over 65 and dependent persons:
The exemption is total for:

• Owners over 65 years of age.
• Persons in a situation of severe or major dependency.

Our advice: to find out the amount of your real estate capital gain, contact the tax administration or your "gestor" (specialized advisor). J’achète en Espagne can recommend trusted experts. Contact us.
And, to go further, we recommend reading our practical guide: “Selling a Property in Spain”.

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