Capital gains on property in Spain: calculation, rates and withholding tax
Capital gains on property in Spain are taxed at 19 per cent
for non-resident French or Belgian sellers, calculated as the sale price minus the purchase price minus documented costs
(purchase tax, notary fees, solicitor’s fees, improvement works, estate agent’s fees). Upon signing the contract, the buyer withholds 3 per cent of the price
(Form 211) as a deposit; the seller settles the balance or recovers the difference via Form 210. Added to this is the municipal capital gains tax
(plusvalía municipal
), a local tax on the land, which is not payable if there is no actual profit. In France, Spanish tax is offset against French tax; in Belgium, capital gains are exempt.
Updated in September 2026 — data verified on that date.
Capital gains on property in Spain: calculation, taxation and tips for non-residents
Tax planning for the resale begins on the day of purchase: every invoice kept (property transfer tax, solicitor’s fees, lawyer’s fees, renovation costs) will be deducted from the taxable gain ten years later, and a 19 per cent penalty is payable to the Spanish tax authorities for any missing supporting documents. This page forms part of our guide to budgeting for a property purchase in Spain because future capital gains are a key factor in the profitability of a property on the Costa del Sol, where property prices by area have risen sharply since 2021.
The mechanism is twofold: a central government tax on capital gains (IRNR for non-residents, IRPF for residents) and a local council tax on the land, known as the ‘plusvalía municipal’; France or Belgium then applies its tax treaty. The steps involved in the sale (sales mandate, deposit, deed of sale) are covered on our page on reselling a property in Spain.
How is capital gain on property calculated in Spain?
Capital gains (ganancia patrimonial) are the difference between the transfer value and the acquisition value, each adjusted for justified costs and taxes. The acquisition value comprises the price paid, the ITP or VAT and the AJD, notary, registry and solicitor’s fees, and the cost of any improvements; the transfer value is calculated by deducting the estate agent’s commission and the municipal capital gains tax from the sale price. If the property has been let, depreciation (3 per cent per annum of the construction value) reduces the acquisition value, even if it has not been deducted.
Since 2015, Spain no longer applies any allowance based on the length of ownership: a capital gain realised after twenty years is taxed in the same way as one realised after two years. Only properties acquired before 31 December 1994 retain tax relief coefficients, capped at a cumulative sale price of €400,000.
Tax rate: 19 per cent for non-EU residents; standard tax scale for residents
A non-resident based in the EU, Iceland, Norway or Liechtenstein pays 19 per cent on their Spanish property capital gains; outside these areas, 24 per cent. The rate is proportional, with no personal allowance, and is declared on Form 210 in accordance with the Agencia Tributaria’s non-resident guide.
A Spanish tax resident includes the capital gain in the savings component of their personal income tax (IRPF), which will be taxed in brackets from 2026: 19 per cent up to €6,000, 21 per cent up to €50,000, 23 per cent up to €200,000, 27 per cent up to €300,000 and 30 per cent above that amount. On the €72,000 in the example, a resident would pay €15,440 instead of €13,680, but would be eligible for the main residence exemptions described below; see tax residency status in Spain.
The 3% withholding tax: the non-resident seller’s withholding tax
The 3% withholding tax is a mandatory advance payment: the buyer of a property sold by a non-resident withholds 3% of the price and pays it to the Agencia Tributaria within one month, using Form 211. The seller then has three months, following this initial month, to submit their Form 210: they pay the difference if the tax exceeds 3 per cent of the price, or claim a refund of the excess, particularly in the case of a sale at a loss. Notary Vicente Martorell explains on notariosyregistradores.com that this refund takes ‘around six months to a year’.
The refund is withheld until the seller is up to date with their annual Form 210 returns for non-resident tax (imputed income or rental income) for four financial years: the Agencia Tributaria first offsets any arrears. If the buyer fails to withhold the tax, the property remains subject to the seller’s tax liability. This point is covered in the due diligence process organised by NOMA with your independent solicitor.
Municipal capital gains tax: the local tax on land value
The municipal capital gains tax (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana, IIVTNU) is a local tax on the increase in value of the land alone during the period of ownership. Since Decree-Law 26/2021, adopted after the Constitutional Court ruled against the previous calculation method, the taxpayer may choose the least costly method: the objective method (cadastral value of the land × annual coefficient set by the State according to the number of years of ownership) or the actual method (actual gain × the land’s share of the cadastral value). The local tax rate is capped at 30 per cent and no tax is payable where there is no gain.
The seller is liable for the tax, but if they are a non-resident, the law designates the buyer as the ‘substitute taxpayer’ (Article 106.2 of the consolidated text of the Local Finance Act): the buyer pays the local authority within 30 working days and deducts the amount from the purchase price. For a flat owned for seven years on the Costa del Sol, expect to pay between a few hundred and €3,000 (indicative range), which is deductible from the taxable gain.
Deductible costs relating to capital gains: what counts, what doesn’t
Costs deductible from the capital gain are those that increase the purchase price or reduce the sale price, supported by an invoice in the owner’s name.
| Item | Deductible? | Proof required |
|---|---|---|
| 7% ITP or 10% VAT + 1.2% AJD | Yes, added to the purchase price | Forms 600 / 601, developer’s invoice |
| Notary, land registry, solicitor, administrative agency fees on purchase | Yes | Invoices in the buyer’s name |
| Improvement works (extension, swimming pool, air conditioning, new kitchen) | Yes | Invoices showing VAT, planning permission where required |
| Maintenance, painting, replacement with identical items | No | — |
| Loan interest, IBI, service charges | No | — |
| Estate agent’s commission on sale, municipal capital gains tax, energy performance certificate | Yes, deducted from the sale price | Bills |
| Depreciation if the property has been let | Reduces the acquisition value (3 per cent per year from the date of construction) | |
The distinction between improvements and maintenance is the primary basis for tax adjustments: a fully refurbished bathroom counts, but a replaced water heater does not. For information on documenting building works, see building works and renovation in Spain.
Tax treaties and tax credits: what happens in France and Belgium?
Capital gains realised in Spain by a French or Belgian resident are taxable in Spain, where the property is situated (Article 13 of the 1995 treaties), and are then treated differently: set-off in France, exemption in Belgium.
The capital gain must also be declared in France (form 2048-IMM within one month) under the French tax regime: 19 per cent tax and 17.2 per cent social security contributions, after allowances for the length of ownership (tax exemption after 22 years, exemption from social security contributions after 30 years), after which the Spanish tax is credited against the French tax, up to the amount of the latter. “Article 24-1-a-ii of the Franco-Spanish Tax Treaty eliminates double taxation through set-off,” summarises Marie Déchelotte, a tax lawyer, in *Village de la Justice
*. In the case of a short-term holding, the French seller therefore often pays additional tax in France; after 22 years, only Spanish tax remains payable.
Belgium exempts capital gains on property realised in Spain (Article 23 of the Belgium-Spain Convention), including in the event of resale within five years, whereas a Belgian capital gain would be taxed at 16.5 per cent. No tax or credit to calculate: the sale is reported as exempt foreign income and the property is excluded from the foreign cadastral income declaration. The annual obligations are outlined on our page on declaring a Spanish property in Belgium
.
How can you legally reduce capital gains? Exemptions and best practices
Legally reducing capital gains on property in Spain involves three key strategies: documenting every expense, claiming main residence exemptions where eligible, and selling at the right time in relation to your tax status. The exemptions under the Personal Income Tax Act (Articles 38 and 33.4) apply to the ‘vivienda habitual’ (main residence): reinvestment of the proceeds in a new main residence within two years, and total exemption after the age of 65. Since 2015, reinvestment has been open to non-residents of the EU/EEA, but only if the Spanish property was their main residence: a second home in Marbella is never eligible.
Three key steps to take at the time of purchase: insist on personalised invoices showing VAT for each item of work, keep hold of the Modelos 600 forms and the purchase fees, and ensure that the furniture is listed separately in the escritura, excluding it from the capital gains calculation. When reselling, ask your solicitor to calculate both methods of capital gains tax. NOMA monitors these points from the property selection stage onwards, as part of its support service.
Timeline and tax returns: Form 211, Form 210, capital gains
D-Day
The buyer pays 97 per cent of the price to the non-resident seller; the notary notes the withholding in the deed.
Day + 1 month
Payment of the withholding tax to the Agencia Tributaria; the buyer provides the seller with proof of payment.
Day + 30 working days
Declaration to the local council, to be made by the substitute purchaser if the seller is a non-resident.
J + 4 months
Settlement at 19 per cent, payment of the balance or request for a refund; deadline unchanged by Order HAC/623/2026.
France: Day + 1 month · Belgium: annual return
Form 2048-IMM in France with proof of Spanish tax; declaration in Belgium.
Capital gains on property in Spain: your questions
What is the 3% withholding tax?
The 3% withholding tax is the advance payment that the buyer of a property sold by a non-resident withholds from the sale price and pays to the Spanish tax authorities within one month (Form 211). The seller then settles their actual tax liability of 19 per cent using Form 210; if the tax due is less than the withholding tax – for example, in the case of a sale at a loss – they may claim a refund of the excess, which is paid within six months to one year.
How can double taxation on capital gains be avoided?
The 1995 France–Spain and Belgium–Spain tax treaties reserve the right to tax the capital gain to Spain; France then credits the Spanish tax against the French tax due on the same capital gain (Article 24), whilst Belgium exempts the gain (Article 23). The French seller attaches the Modelo 210 receipt to their Form 2048-IMM.
Do improvements reduce the capital gain?
Yes, improvement works (extensions, swimming pools, air conditioning, complete refurbishments) documented by invoices in the seller’s name showing VAT are added to the purchase price and reduce the tax by 19 per cent of their value. Maintenance, replacement with identical items and work paid for in cash without an invoice are not allowed.
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