SOBE Knowledge
Capital Gains Tax on Spanish Property
How Spain taxes the profit on a property sale: 19% flat for non-residents, savings rates for residents, a 3% retention mechanism — and a paper trail that decides the bill.
How Spain taxes the gain
When you sell Spanish property at a profit, the gain is taxed: at a flat 19% for non-residents, and at progressive savings rates from 19% up to 30% for Spanish tax residents.
The gain is not the difference between two headline prices. It is the difference between the net sale proceeds and the full acquisition cost — and everything hangs on what you can document. Acquisition taxes and fees raise your cost basis; agency and legal fees plus plusvalía reduce the proceeds; and documented renovation invoices raise the basis further. No invoice, no deduction — and Spain’s limitation rules mean those papers must survive your entire ownership plus four years.
The 3% retention — how non-residents actually pay
Seller files the real gain → Modelo 210 → tax settled, excess refunded
When the seller is non-resident, the buyer is legally required to withhold 3% of the purchase price at completion and pay it to the tax office on account of the seller’s gain. The seller then declares the actual result: if 19% of the true gain is less than the retention — or the sale made a loss — the difference comes back as a refund; if more, the seller tops up. The refund is real but unhurried: months, not weeks.
The retention is a payment on account, not the tax itself. A seller who treats 3% as the final bill — or forgets to file for the refund — is donating money in one direction or the other.
A worked example — non-resident seller
A simplified, hypothetical resale:
Tax at 19%: €18,050.
Retention at completion: 3% × €700,000 = €21,000 already withheld by the buyer.
Modelo 210 outcome: a refund of €2,950 — and note that the €30,000 of invoiced renovation saved €5,700 in tax by itself. The facturas earned their keep.
Model the whole hold, not just the exit
SOBE Hold & Exit ROI Calculator
Pre-tax by design — but it shows the gain, the selling costs and the net proceeds your tax will be calculated from.
If you are a Spanish tax resident
Residents pay on the savings scale — brackets rising from 19% to 30% on large gains — but hold reliefs non-residents do not: reinvesting the proceeds of a habitual residence into another within two years exempts the reinvested share, and sellers over 65 disposing of their habitual residence are exempt outright. Transitional reductions for pre-1994 purchases survive in limited form. Residence status is therefore worth establishing precisely before a major sale — it can be worth more than any negotiation.
Four ways the gain gets overtaxed
1. Lost invoices. Renovation without facturas is renovation the tax office never saw. Keep every one for the whole ownership plus four years.
2. Forgetting the second tax. Plusvalía is separate and additional — though once paid, it deducts from this gain.
3. Treating the 3% as final. It is an advance. File the Modelo 210 — in either direction.
4. Selling in the wrong year. For soon-to-be residents or leavers, the calendar year of the sale can move the applicable regime entirely. Sequence the sale with advice, not sentiment.
Frequently asked questions
What is the capital gains tax rate on Spanish property?
A flat 19% for non-resident sellers. Spanish tax residents pay on the progressive savings scale, with brackets rising from 19% to 30% on the largest gains.
What is the 3% retention?
When the seller is non-resident, the buyer must withhold 3% of the price at completion and pay it to the tax office via Modelo 211. It is an advance, not the final tax: the seller then files Modelo 210 to settle the real figure and claim any refund.
What costs reduce the taxable gain?
Acquisition taxes and fees raise the cost basis; documented renovation invoices raise it further; agency fees, legal fees and plusvalia paid on the sale reduce the proceeds. Everything depends on paperwork - no invoice, no deduction.
Are there exemptions for residents?
Yes: reinvesting the proceeds of a habitual residence into another within two years exempts the reinvested share, and sellers over 65 disposing of their habitual residence are exempt outright.
How long should I keep renovation invoices?
For the entire ownership plus four years after the sale - the period during which the tax office can review the declared gain.