Tax on the sale of real estate in Spain
The sale of real estate in Spain is accompanied by a number of tax obligations and document requirements. Knowledge of the basic aspects of taxation and the preparation of the necessary papers will help to carry out the transaction quickly and without unnecessary difficulties.
Land value gain tax
Land value gain tax
Land value tax (Impuesto sobre el Incremento de Valor de Terrenos de Naturaleza Urbana)
This tax is calculated as the difference between the cadastral value of the plot at the time of its acquisition and the value at the date of sale. The amount of tax varies depending on the municipality where the property is located.
Capital gains tax for non–residents (IRNR - Impuesto sobre la Renta de No Residentes)
This tax category applies to the difference between the price at which the property was purchased, including all transaction costs, and the sale price.
If you are a tax resident of Spain, the confirmed expenses for home improvement, as well as depreciation of the object, can be deducted from the sale amount. The annually published coefficients adjusting the tax base are also used.
Unfortunately, such expenses are not taken into account for non-residents of Spain.
In 2021, residents of Spain paid tax at a progressive rate:
- 19% on income up to € 6,000;
- 21% on amounts over € 6,000.
- Non-residents, on the contrary, were taxed at a fixed rate of 24% on all income earned in Spain.
Important clarification:
When selling real estate, the seller receives 97% of the transaction amount, since 3% is withheld as an advance payment for capital gains tax. If the final amount of tax turns out to be less than the withheld amount, the non-resident has the right to request a refund of the difference by submitting an application to the tax authorities.
Documents required for the sale of real estate:
The title documents for the object are a bill of sale (Escritura Publica de Compraventa) registered in the Property Register (Registro de Propiedad), as well as a Nota Simple extract with up–to-date information about the owner and status of the object.
Confirmation of the absence of property tax arrears – IBI certificate.
The certificate of absence of violations of urban planning regulations is issued by the Mayor’s office and confirms the absence of illegal changes in the facility.Your Individual Alien Number (NIE) is the original document.
Notarized power of attorney – if the sale is carried out through a representative. If the property has several owners (for example, spouses), the power of attorney must be signed by all owners. The text of the power of attorney clearly indicates the powers transferred to the representative.
These documents are necessary for the successful completion of the transaction and compliance with all legal requirements.
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