Taxes of selling a property: What is the Plusvalia tax in Spain?

Taxes of selling a property What is the Plusvalia tax in Spain

If you are planning on Selling your property in Marbella or anywhere in Spain, you will have to assume a series of expenses and certain taxes. One of the taxes that charges the selling of a property in Spain is the Plusvalía. But what is it?

There are thousands of articles about how much will the buyer pay for the purchase of a property in Spain (aprox. 10% of the property price). However, it is not so common to talk about the costs incurred by the seller of the property.

As a property seller, what expenses do I have to pay when selling my property in Spain?

Doesn’t matter if you are selling an apartment, a townhouse or a luxury villa, the selling of a property also involves costs and taxes that you must take into account when setting the price of your property in order to avoid unpleasant surprises.

Broadly speaking, the person who sells his or her home must pay the capital gain tax, the plusvalía, notary fees and the cancellation of the mortgage -if there was any-.

UPDATE 26-10-2021: At the moment, the Constitutional Court has annulled the municipal capital gains tax, but the Ministry of Finance will review it to “guarantee its constitutionality and the financing of local councils”. For now this tax is suspended but without retroactive character, that is to say, those who have sold their property before and already paid the capital gains tax are not entitled to claim it.

What is the Plusvalía tax in Spain?

The plusvalía is a local tax charged by the townhall on the increase in the value of the property when it is sold. The reason beneath this tax is the increase of the property value due to the improvements done in the area by the local government.

All about the Plusvalia: Who pays it, when and where?

When a property is sold, the Seller must pay the plusvalía. Buyer and seller may reach an agreement for the buyer to pay it, however the administration will always demand it from the person selling the property.

But pay close attention! If the seller resides abroad, the buyer of the house must pay this tax. In addition, if it were not a sale, but a gift or donation, it would be the recipient of the property who should assume the payment of this tax.

This tax must be paid within 30 working days of the sale of the property (six months in case of inheritance), and you must go to the townhall of the city in which the house is located.

Is there any way to pay less or not pay the Plusvalia tax?

Yes, in some cases there are ways to pay less plusvalía or even not to pay it at all. This tax has some excemptions and bonuses, although its application depends on each city council.

The transfer of real estates within the historical – artistic perimeter of a municipality are exempt, as well as the properties declared as Cultural Interests, but only if their owners made the rehabilitation or improvement of the house, and not the townhall.

There are some exemptions in the payment of the plusvalia tax in Spain, namely when the property ownership is being transferred between spouses or in favor of a child to comply with sentences of separation or divorce.

Some city councils such as the Madrid one, also apply bonuses between 15% and 95% if the transfer of the property ownership is due to death.

If you want to know more about taxes when selling your property, advice on how to sell your property in Marbella or the Costa del Sol or would like us to give you more information on any matter related to this issue, don’t hesitate to contact us!

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  1. Reply Peter Robinson

    We bought an apartment 18 years ago for 90,000 sold it in 2018 for 120,000 we had to pay Plusvalia tax, 5,400,
    We were told that although the value of 90,000 18 years ago is more then 200,000 now, so in that case we made a loss.
    This was not taken in account, this must be an illegal tax the town hall have taken.
    Please comment if possible.
    Regards, Peter Robinson

    • Ainhoa

      Dear Mr. Robinson,
      The Plusvalía Tax, charges the increase of value due to the improvements done in the area by the local government. Therefore, it is not related with the market value of the property but with the cadastral value of your property when sold. The plusvalía is calculated according to the number of years you had the ownership and the purchase and selling price. Each Town Hall has its own graph of figures used to calculate the Plusvalía Tax and these are different for each municipality. If you sold the property for a price higher than the purchasing costs, you will have to pay plusvalía, even if you sold it below Its market value.
      I hope you find this information useful. Kind regards

  2. Reply Julia Stanbrook

    I sold a property in 2020 for €100,000 less than what I paid for it in 2007. As I was a non-resident, Plusvalia of €1310 was deducted from the sale and given to the new buyer to pay within 30 days. I attended SUMA to request a refund and after 15 months, I discovered the buyer never received a letter of payment, so has never paid it. How do I get back my money from the new buyer. My lawyer says the buyer can keep it for 4 years! Is this correct?

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