I have sold or bought my house in Spain: What you need to know about the Spanish tax authorities
16/06/2023

When buying or selling a property in Spain, it is important to be aware of the tax implications involved. The Agencia Estatal de Administración Tributaria, commonly known as Hacienda, plays a key role in these processes. In this article, we will explore what happens with the Hacienda when a property transaction takes place in Spain, both from the point of view of the seller and the buyer. Understanding these tax issues is essential to avoid unpleasant surprises and to comply with the corresponding tax obligations.

I am selling my house

When you sell a property in Spain, you must take into account the obligation to pay the Tax on the Increase in Value of Urban Land (IIVTNU), also known as "plusvalía municipal". This tax is calculated according to the increase in the value of the land from acquisition to sale. The liquidation and payment of this tax corresponds to the seller, who must present the self-assessment to the corresponding town hall within the established deadlines.

On the other hand, the seller must also consider the Capital Gains Tax (IRPF) in the event of making a profit on the sale of the property. This tax is levied on the difference between the acquisition value and the sale value, and a progressive rate is applied depending on the period of ownership. It is essential to declare this gain in the income tax return for the tax year in which the sale took place.

I am going to buy a house

The buyer will have to pay the Transfer Tax and Stamp Duty (ITP and AJD), which varies depending on the Autonomous Community. The ITP is applied to the purchase value of the property, while the AJD is levied on the notarial documents necessary to formalise the transaction, such as the deed of sale. It is important to bear in mind that, on some occasions, Value Added Tax (VAT) may be applied instead of ITP, as in the case of new or first transfer properties.

In addition to these direct taxes, both the seller and the buyer must pay attention to other tax obligations related to the sale or purchase of a property. For example, it is necessary to pay the Property Tax (IBI) to the corresponding local council. It is also advisable to request the Energy Efficiency Certificate, which is compulsory for the sale or rental of properties, and which must be presented to the notary at the time of the deed.

In summary, the purchase or sale of a property in Spain entails a series of tax implications that must be considered by both the seller and the buyer. From the payment of the municipal capital gains tax and personal income tax by the seller, to the transfer tax and stamp duty or VAT by the buyer, these taxes and tax obligations form part of the real estate process. At GR Estates we advise you to seek the advice of a specialised professional, such as a tax advisor or lawyer, to ensure compliance with tax obligations and avoid possible future problems with the Treasury.

The GR Estates team