There are two taxes to pay for the sale of a property in Spain. One of them, capital gains, is municipal in nature, and there is a free online calculator to calculate numbers before paying it off.
The other one is personal income tax, which is paid to the Tax Agency in the income tax return during the year following the sale.
The municipal capital gain taxes the increase in the value of the land on which the sold home is located, and must be settled within 30 business days after the sale. It is crucial to be very clear about how it is calculated, to anticipate any surprises later.
What many people don’t know is that there are two methods to calculate capital gains. City councils apply the “objective method” by default, but the taxpayer can request the application of the “real method” if he demonstrates that it benefits him.
Housfy, a comprehensive real estate and home services platform, helps you sell your apartment faster and at the best price. In addition, their real estate advisors can accompany you throughout the entire process and resolve your doubts regarding the payment of municipal capital gains and other taxes.
The municipal capital gain is NOT a tax that is levied on people, but rather the increase in the value of the land. It is mandatory for everyone when this revaluation of the land occurs, and there are no exceptions due to age or disability.
Of course, the municipal capital gain will not have to be paid if it is proven that the land has devalued over time. You also do not have to pay it in the transfers of rural properties, that is, non-urban ones.
And there is also a range of entities that are exempt from paying this tax. For example, the State, the Red Cross or even some properties declared of cultural interest included in the General Catalog of Protected Buildings, in addition to other cases.
Declaring the capital gains obtained from the sale is an obligation, and the taxpayer must pay personal income tax based on them.
To calculate the personal income tax for the sale of a property, it is necessary to take into account the acquisition value of the home, which will be the price for which you bought it (counting the expenses and taxes derived from the purchase) or the value declared in Inheritance Tax if the property comes from an inheritance.
You must calculate the capital gain (sale value – acquisition value) and apply the corresponding tax rate, which is progressive. If you document losses, you will not have to pay personal income tax on them, although you will have to declare them anyway.
Yes, in the case of personal income tax, there are several cases in which the taxpayer is not obliged to pay it:
Those over 65 years of age who sell a second home can be exempt from paying personal income tax if they reinvest the profit from the sale in a life annuity, with a maximum of €240,000 and within a period of 6 months.
