Taxes When Selling a House on the Costa del Sol

Selling a property on the Costa del Sol does not mean that all the profit is tax-free. The taxes when selling a house on the Costa del Sol include capital gains tax under IRPF or IRNR, municipal plusvalía, and, in some cases, specific withholdings for non-residents. Knowing them in advance will allow you to plan and obtain the maximum return from your transaction.

What is the most important tax when selling a house?

The main tax is the one levied on the capital gain obtained from the sale. It is calculated by subtracting the acquisition value from the transfer value and is subject to taxation in Spain.

What is the difference between residents and non-residents?

• Tax residents in Spain: pay tax on the gain through IRPF, with rates between 19% and 28%.

• Non-residents: pay tax under IRNR at 19% if residents of the EU/EEA, or 24% if residing outside.

What is the municipal plusvalía and who pays it?

The municipal plusvalía (Tax on the Increase in Value of Urban Land) taxes the increase in land value. It is paid by the seller, unless otherwise agreed. Its amount depends on the cadastral value and the number of years since the last transfer.

What withholding applies to non-residents?

If you are a non-resident in Spain, the buyer is obliged to withhold 3% of the sale price and pay it to the Tax Agency. You may later claim a refund if your actual gain was lower.

What expenses can I deduct to reduce the gain?

Among the deductible expenses that reduce capital gain are:

• Notary and registry fees from the original purchase.

• Real estate agency fees from the sale.

• Renovations and improvements supported by invoices.

• Taxes paid on acquisition.

How do taxes compare between residents and non-residents?

Are there any tax exemptions?

Yes, some of the main exemptions are:

• Reinvestment in main residence: if you are a resident in Spain and reinvest in another main home, you may be exempt from paying tax on the gain.

• Residents over 65 years old: exempt if they sell their main residence.

• Double taxation treaties: may prevent you from paying taxes twice in your country of origin.

What tax strategies exist to optimize the sale?

• Plan the sale in advance and evaluate the most favorable tax timing.

• Document all improvements made to the property to deduct them.

• Consult a tax advisor specialized in foreign buyers and sellers.

How much should I set aside in total when selling my property?

As a guideline:

• Between 19% and 28% of the capital gain (depending on residency).

• Municipal plusvalía (variable, depending on the municipality).

• 3% withholding if you are a non-resident.

Conclusion: What taxes do I pay when selling a house on the Costa del Sol?

Selling a house on the Costa del Sol can be highly profitable, but it is important to clearly understand the taxes you must pay: capital gains, plusvalía, and possible withholdings. With proper planning and professional advice, you can reduce the tax burden and ensure your investment yields the expected results. Selling a property here is not only a financial transaction: it is also opening the door to new life and investment opportunities.

Frequently Asked Questions

Who pays the municipal plusvalía?
Generally the seller, unless otherwise agreed in the contract.

What is the tax rate for non-EU residents?
19% on the capital gain.

And for non-residents outside the EU?
24% on the capital gain.

What withholding applies to non-residents?
3% of the sale price, withheld by the buyer.

Can renovations on the property be deducted?
Yes, as long as they are supported by official invoices.

Recommended Buying Guide

Do you want to go one step further? Don’t miss our Buying Guide in Spain, where you will find a detailed explanation of the entire process, the required documents, and the taxes you need to consider before investing.