Legal & Tax · 13 min

Capital Gains Tax in Spain: What You Pay When You Sell Your Costa Blanca Property

18 May 2026 · Hansson & Hertzell

Selling Spanish property? Capital gains tax (CGT) applies to the profit — but the rate, exemptions, and calculation rules are often misunderstood. Here's the complete guide for 2026.

When you sell a property in Spain for more than you paid for it, the profit is subject to capital gains tax (Impuesto sobre la Renta de No Residentes — IRNR for non-residents, or IRPF for residents). Understanding how this works before you sell — ideally before you buy — is essential financial planning.

This guide covers how CGT is calculated, what exemptions exist, and what non-resident sellers specifically need to know.

Note: Tax law changes frequently. Always confirm your position with a qualified Spanish tax advisor before any transaction.

The Basic Calculation

Your taxable gain is:

Sale price minus original purchase price minus allowable deductions = taxable gain

Allowable deductions include:

• The original purchase price you paid
• Purchase costs paid at the time (ITP or IVA, notary, registry, legal fees)
• Capital improvements made to the property (extensions, pool additions, structural works) — must be documented with receipts and planning permissions
• Selling costs (agent commission, legal fees, energy certificate, plusvalía)

What you cannot deduct: routine maintenance, decoration, furniture, appliances, or any improvements without official documentation.

The CGT Rates for 2026

Spain taxes capital gains on property at progressive rates:

| Gain Amount | Tax Rate | |-------------|----------| | First €6,000 | 19% | | €6,001–€50,000 | 21% | | €50,001–€200,000 | 23% | | €200,001–€300,000 | 27% | | Above €300,000 | 28% |

These rates apply to the gain, not the sale price. If you bought for €200,000 all-in and sell for €350,000 all-in costs, your gain is approximately €150,000 — not €350,000.

The 3% Withholding: Critical for Non-Residents

If you are a non-resident selling Spanish property, the buyer is legally required to withhold 3% of the sale price and pay it directly to the Spanish tax authority (Agencia Tributaria) on your behalf. This is not a tax itself — it's a deposit against your potential CGT liability.

After the sale, you file a non-resident tax return (Form 210) within 4 months, declaring your actual gain and paying the correct CGT from which the 3% withholding is deducted. If the 3% exceeds your actual CGT liability, you receive a refund. If your liability exceeds 3%, you pay the difference.

Example: You sell for €400,000. The buyer retains €12,000 (3%) and pays it to the tax office. Your actual CGT on a gain of €80,000 works out at approximately €18,880. You pay an additional €6,880, and the €12,000 withholding covers the rest.

Your Spanish lawyer should manage the entire 3% process. Never complete a sale without confirming this has been handled correctly.

Key Exemptions

Primary Residence Exemption (Residents Only) Spanish tax residents who sell their primary residence and reinvest the proceeds in another primary residence within two years can be fully exempt from CGT. This exemption does not apply to non-residents or to holiday/investment properties.

Over-65 Exemption (Residents Only) Spanish tax residents aged 65 or over who sell their primary residence are completely exempt from CGT regardless of the gain. Again, non-residents and non-primary-residence properties are excluded.

Non-Resident EU/EEA Citizens EU and EEA citizens who are non-residents pay CGT at the same rates as residents (19–28% progressive). Non-EU non-residents were historically subject to a flat 19% rate.

Plusvalía: The Other Tax on Selling

Separate from CGT, sellers also pay plusvalía municipal — a local tax on the theoretical increase in land value since you purchased. This is charged by the municipality based on the cadastral value of the land (not the building) and the number of years you've owned it.

Since a 2021 Supreme Court ruling, you cannot be charged plusvalía if you sell at a loss. For gains, the amount varies by municipality and ownership period. In most Costa Blanca municipalities, plusvalía on a typical property owned for 10 years runs €1,500–€5,000. Your lawyer will calculate this precisely.

Planning Points for Future Sellers

1. Keep all purchase documentation. The original escritura (title deed), all receipts for improvements, and original purchase cost invoices all reduce your taxable gain.

1. Document improvements properly. Any extension, pool, or structural work needs planning permission, completion certificate, and receipts to count as a deductible cost. Undocumented improvements cannot be deducted.

1. Consider timing. If you are close to a major threshold (e.g., a gain just over €200,000), the timing of a sale within a tax year can affect which bracket applies.

1. Get independent tax advice before agreeing a price. The net proceeds after CGT and plusvalía can differ significantly from what you expect. Know your numbers before you commit to a price.

How Hansson & Hertzell Can Help

We work with a network of trusted independent Spanish tax advisors and lawyers who specialise in non-resident property transactions. When you instruct us to sell your property, we can introduce you to the right professionals to ensure the process is financially efficient and fully compliant.

Contact us for a confidential discussion about selling your Costa Blanca property.

Frequently Asked Questions

What is the capital gains tax rate in Spain for non-residents?

Non-residents from EU/EEA countries pay 19% on capital gains from Spanish property sales. Non-EU residents (including UK citizens post-Brexit) pay 24%. The gain is calculated as the difference between the sale price and the adjusted purchase price, after deducting allowable costs and improvements.

What is the 3% withholding tax for non-residents?

When a non-resident sells Spanish property, the buyer is legally required to withhold 3% of the sale price and pay it directly to the Spanish tax authority (Agencia Tributaria). This is a provisional payment against the seller's capital gains liability — not an additional tax. You reclaim the difference (or pay any shortfall) via a Modelo 210 tax return.

How do I calculate my capital gains on a Spanish property?

Gain = Sale price minus purchase price minus allowable costs. Allowable deductions include: original purchase price, purchase costs (ITP/IVA, notary, legal fees, land registry), declared improvement costs (receipts required), costs of sale (agent commission, legal fees, notary). The net figure is your taxable gain.

Can I deduct the cost of renovations from capital gains?

Yes, but only renovations that are formally declared and have proper documentation. Receipts, invoices from registered contractors, and building permits (where applicable) are required. Purely cosmetic improvements with undocumented cash payments cannot be deducted. Major structural works with correct paperwork can significantly reduce your taxable gain.

What is plusvalía and is it different from capital gains tax?

Yes — they are completely separate. Capital gains tax (CGT) goes to the national/regional government and is based on the profit you made. Plusvalía (municipal land tax) goes to the local town hall and is based on the official increase in land value during your ownership period, using a formula — regardless of whether you actually made a profit. Both apply on sale.

Is there a CGT exemption for selling my main home in Spain?

Yes, if Spain is your primary residence (fiscal residency) and you reinvest the full proceeds into another primary residence within 2 years, you may be exempt from CGT. This requires genuine fiscal residency (spending 183+ days per year in Spain). Non-residents do not qualify for this exemption.

What is the reinvestment exemption for people over 65?

Spanish residents over 65 who sell their primary residence are fully exempt from CGT — regardless of whether they reinvest. This is a significant advantage for retirees who have built up a Spanish primary residence. Non-residents over 65 do not qualify for this exemption.

How long do I have to file my CGT return after selling?

The Modelo 210 non-resident tax return must be filed within 3 months of the sale. The 3% withholding is deducted at the point of sale and paid immediately by the buyer. Your CGT return reconciles the actual liability against that withholding. Failure to file on time attracts surcharges and interest.

Does CGT apply if I sell at a loss?

If you sell for less than you paid (adjusted for costs), there is no CGT liability. You may also be able to offset capital losses against gains in other years under certain conditions. The 3% withholding still applies at the point of sale — you reclaim it in full via your Modelo 210 if there is no gain.

What records should I keep to minimise capital gains tax?

Keep permanently: original purchase escritura (title deed), all purchase receipts (legal fees, notary, ITP paid), receipts for major renovations (with contractor invoices and permits), community of owners accounts, and any correspondence with tax authorities. Good records can save tens of thousands on a significant sale.

Can I use my Spanish mortgage balance to reduce capital gains?

No. The outstanding mortgage balance is not deductible from capital gains. Your gain is based on the sale price versus the original purchase price — not your net equity position. The mortgage is a separate financial arrangement and has no direct impact on the capital gains calculation.

How does CGT interact with inheritance? If I inherit a property, what is my base cost?

When you inherit Spanish property, your tax base (for future CGT purposes) is the declared value at the time of inheritance. If property values rise after you inherit, you pay CGT on gains from that inheritance value — not from what the deceased originally paid. Getting a good valuation at the time of inheritance is important.

Should I sell before or after the 1 June 2026 ITP change?

As a seller, the ITP change doesn't directly affect you — ITP is paid by the buyer. However, the lower ITP may stimulate more buyer demand, potentially enabling you to achieve a better price. If you are also buying a replacement property, the ITP reduction on your purchase is relevant.

Are there any CGT planning strategies for non-residents?

The main planning tools are: establishing Spanish fiscal residency before sale (to access reinvestment exemption or the over-65 exemption), maximising deductible costs, timing the sale into a tax year where other losses offset gains, and corporate ownership structures (though these have their own tax implications). Take specialist advice well before selling.

Where can Hansson & Hertzell help with selling?

We provide market valuations, manage the sale process, and coordinate with solicitors, gestorías, and tax advisers. We can connect you with specialists who handle Modelo 210 filings and CGT planning for non-resident property owners across the Costa Blanca.