Selling Property in Spain as a UK Citizen: The Complete Tax Guide

Capital Gains Tax on the Sale

When you sell a property in Spain, you are liable for capital gains tax (Impuesto sobre la Ganancia Patrimonial) on any profit. The tax treatment depends on whether you are a Spanish tax resident or a non-resident at the time of the sale.

Non-Resident Sellers (Most UK Owners)

If you are a non-resident of Spain — meaning you are UK tax resident and the Spanish property is a holiday home or investment — the capital gains tax rate is a flat 19% on the net gain.

The net gain is calculated as:

• Sale price (as declared in the escritura de compraventa)
• Minus purchase price (as declared in the original escritura)
• Minus allowable costs of purchase: transfer tax (ITP) or VAT paid on purchase, notary fees, land registry fees, legal fees
• Minus allowable costs of sale: estate agent commission, legal fees, energy certificate cost
• Minus cost of improvements: Any capital improvements (not repairs) made to the property, supported by invoices. This includes extensions, new kitchens, new bathrooms, new roofs — anything that added value, not merely maintained it.

Worked Example

You bought an apartment for €200,000 in 2018. Purchase costs were €20,000 (ITP, notary, legal). You installed a new kitchen for €15,000 and added a terrace enclosure for €8,000 (both with invoices). You now sell for €300,000. Agent commission is €15,000 (5%) and legal fees are €2,000.

• Total acquisition cost: €200,000 + €20,000 + €15,000 + €8,000 = €243,000
• Net sale proceeds: €300,000 - €15,000 - €2,000 = €283,000
• Capital gain: €283,000 - €243,000 = €40,000
• Tax at 19%: €7,600

Spanish Tax Resident Sellers

If you are a Spanish tax resident when you sell, the gain is added to your savings income and taxed at progressive rates:

• First €6,000: 19%
• €6,001 to €50,000: 21%
• €50,001 to €200,000: 23%
• €200,001 to €300,000: 27%
• Over €300,000: 28%

However, if the property is your habitual residence and you reinvest the entire proceeds into another habitual residence within 2 years, the gain is exempt from tax. Additionally, sellers over 65 who sell their habitual residence are fully exempt regardless of reinvestment.

The 3% Retention by the Buyer

This is one of the most important mechanisms for non-resident sellers to understand. When you sell a Spanish property as a non-resident, the buyer is legally required to retain 3% of the sale price and pay it directly to the Spanish tax authority (Agencia Tributaria) on your behalf. This is done through Modelo 211, which the buyer files within one month of the sale.

The 3% retention acts as a payment on account of your capital gains tax. It is not an additional tax — it is an advance payment. After the sale, you file Modelo 210 (capital gains declaration) and:

• If your actual CGT liability is less than the 3% retained, you receive a refund of the difference
• If your actual CGT liability is more than the 3% retained, you pay the difference

Example

On a €300,000 sale, the 3% retention is €9,000. If your actual capital gains tax is €7,600 (as in the example above), you are entitled to a refund of €1,400. You claim this refund by filing Modelo 210 within 3 months of the sale (the filing period starts one month after the sale and runs for 3 months).

If you sold at a loss (no capital gain), the entire €9,000 is refundable. However, the Agencia Tributaria is notoriously slow in processing refunds — expect 6-12 months, sometimes longer.

Important: Don't Forget to Claim

Many non-resident sellers forget to file the Modelo 210 after the sale, leaving the 3% retention sitting with the tax authority unclaimed. On a €300,000 sale, that is €9,000 you are leaving on the table. Ensure your lawyer or gestoría files the return promptly.

Plusvalía Municipal Tax

The Plusvalía Municipal (officially Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana — IIVTNU) is a local tax levied by the town hall on the increase in land value during your ownership period. It is separate from the national capital gains tax.

How It Is Calculated

Since a 2021 Constitutional Court ruling declared the previous calculation method unconstitutional, the plusvalía is now calculated using one of two methods — the seller can choose the more favourable one:

• Method 1 (Objective): Based on the catastral value of the land multiplied by coefficients set by each town hall for the number of years of ownership (maximum 20 years). The coefficients for 2026 are set annually by each municipality.
• Method 2 (Real gain): Based on the actual gain in land value, calculated as the difference between the land portion of the sale price and the land portion of the purchase price.

If you sold at a loss (no gain in value), you do not owe any plusvalía. This was the key change from the 2021 ruling — previously, the tax was charged even on loss-making sales.

Who Pays?

Legally, the plusvalía is the seller's responsibility. However, it is common in Spain for the buyer and seller to negotiate who pays it as part of the sale agreement. In some regions and market conditions, the buyer agrees to pay or split the cost.

Typical Amounts

The plusvalía varies enormously depending on the municipality, the catastral value, and the length of ownership. Typical amounts range from €500 to €5,000 for a standard apartment, but can be much higher for long-held properties in prime locations with high catastral values.

You must pay the plusvalía within 30 working days of the sale. Late payment incurs penalties and interest.

Agent Commission

Estate agent commission in Spain is not regulated — it is freely negotiable. Typical rates are:

• 3-5% of the sale price for standard resale properties
• 5-6% for properties under €200,000 (agents need a minimum fee to justify the work)
• 1-3% for high-value properties (over €1 million)

Commission is usually paid by the seller in Spain (unlike in many other countries where the buyer pays, or both parties share the cost). The commission is subject to 21% IVA (VAT), so an agent charging 5% on a €300,000 sale will invoice €15,000 + €3,150 IVA = €18,150 total. The IVA is reclaimable if you are selling through a company; for personal sales, it is an additional cost.

Negotiation tip: In a strong seller's market, agents may accept lower commissions. If you list with multiple agents (non-exclusive), rates tend to be higher (5-6%). An exclusive listing often secures a lower rate (3-4%).

Legal Costs for the Seller

As the seller, your legal costs typically include:

• Lawyer: €1,000-€2,000 for handling the sale, reviewing contracts, attending the notary, and managing post-sale tax filings
• Gestoría fees: €200-€500 for filing the various tax forms (Modelo 210 for capital gains, plusvalía declaration)
• Energy Performance Certificate (EPC): €150-€300, required by law before listing the property for sale
• Community debt certificate: €50-€100, obtained from the community administrator to prove no outstanding community fee debts
• Nota simple: €10-€20, the land registry extract confirming your ownership and any charges
• Mortgage cancellation: If you have a Spanish mortgage, the bank will charge a fee for issuing the cancellation certificate (certificado de deuda cero) — typically €200-€500. The notary fee for the cancellation deed is a further €300-€600, plus land registry fees of €50-€100.

Energy Certificate Requirement

Since 2013, Spanish law requires that all properties offered for sale (or rent) must have a valid Certificado de Eficiencia Energética (Energy Performance Certificate). This rates the property from A (most efficient) to G (least efficient). The EPC must be:

• Obtained before listing the property for sale
• Included in all advertising (the rating must be shown)
• Presented at the notary when the sale is formalised
• Valid for 10 years

The certificate is issued by a qualified energy assessor (técnico certificador) after inspecting the property. Cost: €150-€300 depending on the property size and location.

Timeline for Selling

A typical sale timeline in Spain is:

• Weeks 1-2: Engage a lawyer, obtain the EPC, gather documentation (nota simple, IBI receipts, community certificates)
• Weeks 2-4: Appoint an estate agent, agree the listing price, professional photos and listing go live
• Weeks 4-16: Marketing period. Average time to sell varies hugely by location and price — 3-6 months is typical for well-priced properties on the costas
• Offer and reservation: Once you accept an offer, the buyer typically pays a reservation deposit (€3,000-€10,000) to take the property off the market for 2-4 weeks
• Private contract (contrato de arras): A binding contract where the buyer pays 10% of the price as a deposit. If the buyer pulls out, they lose the deposit. If the seller pulls out, they must return double the deposit.
• Completion (escritura pública): Typically 4-8 weeks after the arras contract. Both parties (or their representatives with power of attorney) attend the notary. The balance is paid, the deed is signed, and ownership transfers.

Total timeline from listing to completion: typically 4-8 months.

Repatriation of Funds to the UK

After the sale completes, you will have the net proceeds in your Spanish bank account (minus the 3% retention, agent commission, and any mortgage repayment). To transfer the funds to the UK:

• Do not use your Spanish bank's transfer service: Banks typically charge €20-€50 in transfer fees plus a 2-4% markup on the exchange rate. On €250,000, the exchange rate markup alone could cost you €5,000-€10,000.
• Use a currency transfer specialist: Companies like Wise, Currencies Direct, OFX, or Moneycorp offer exchange rates much closer to the mid-market rate. Typical markup: 0.3-0.5%. On €250,000, the saving compared to a bank transfer could be €3,000-€8,000.
• Consider a forward contract: If you are not in a rush to transfer, you can lock in an exchange rate for up to 2 years. This protects you against adverse rate movements while you wait for the optimal time to transfer.
• Anti-money laundering checks: For large transfers (over €50,000), the currency broker will require proof of the source of funds — typically the notarial deed of sale and a bank statement showing receipt of the proceeds. Have these documents ready to avoid delays.

Tax in the UK

If you are UK tax resident when you sell your Spanish property, you must also report the capital gain on your UK Self Assessment tax return. The UK gives a credit for the Spanish CGT paid, so you will only pay UK CGT on the gain to the extent that UK rates exceed Spanish rates. For residential property, UK CGT rates are 18% (basic rate) or 24% (higher rate) — since the Spanish rate is 19%, higher-rate UK taxpayers may owe an additional 5% to HMRC.

Selling a property in Spain involves more taxes and costs than most UK owners expect. Between the capital gains tax, the 3% retention, the plusvalía, agent commission, and legal fees, total selling costs can amount to 10-15% of the sale price. Budget for these from the outset, and ensure you have a good lawyer and gestoría managing the tax filings to recover the 3% retention and optimise your position.