Taxes on Selling Spanish Property: What You Need to Know

If you're considering selling your property in Spain, it's crucial to understand the tax
implications. At Lennard Properties, we know that navigating Spanish tax legislation can be
complex. That's why we've put together this guide to help you understand the key aspects.

1. Plusvalía Municipal (Municipal Capital Gains Tax)
Also known as Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza
Urbana; (IIVTNU), this is a local tax levied by the municipality where the property is located.
The tax is calculated based on the increase in value of the land (not the building) since the
last transfer. The rate varies by municipality and the duration of ownership.
Tip: In some cases, this tax can be negotiated or contested if the actual increase in value is
lower than the municipal calculation.

2. Capital Gains Tax (Ganancias Patrimoniales)
This refers to the "ganancias patrimoniales derivadas de la venta de inmuebles" - the capital
gains tax arising from the sale of real estate.
- Non-residents: This tax falls under the "Impuesto sobre la Renta de No Residentes"
(Income Tax for Non-Residents). Non-residents pay 19% (for EU/EEA citizens) or 24% (for
non-EU/EEA citizens) on the capital gain.
- Residents: For tax residents of Spain, this tax is levied as part of their regular income tax,
with the percentage varying depending on the amount of the gain.
The capital gain is calculated as the difference between the purchase price and the sale
price, taking into account certain deductible costs such as:
- Notary and registration fees for purchase and sale
- Real estate agent commissions
- Property improvements (with invoices as proof)

3. Retención (Withholding for non-residents)
This rule only applies to sellers who are not tax residents of Spain. In this case, the buyer is
required to withhold 3% of the sale price and pay it to the Spanish tax authorities on behalf
of the seller. This serves as an advance payment on the seller's capital gains tax and ensures
that non-residents meet their tax obligations.
Note: This withholding does not apply to sellers who are tax residents of Spain. They handle
their tax matters directly through their annual tax return.

Conclusion
Selling a property in Spain involves various tax obligations. It's crucial to take these costs
into account when determining your sale price and calculating your potential proceeds.
At Lennard Properties, we're here to guide you through this process. Our expertise in the
local real estate market, combined with our network of tax advisors, ensures that you can
make well-informed decisions when selling your Spanish property.
Contact us for a personal consultation about your specific situation. We're here to help you
maximize your real estate transaction while fully complying with all tax obligations.