What Taxes Do You Pay When Selling a House in 2025: Clear Tax Guide

Selling your home can feel like a relief… until the taxman comes knocking. Because yes, selling a property in Spain generates taxes. And if you don't calculate them correctly, you could be in for a nasty surprise.

To avoid that, here's a clear, direct, and fully updated guide for 2025. With steps, examples, and figures so you know exactly what you need to pay—and how to legally reduce it.

1. Municipal Capital Gains Tax (Plusvalía municipal): The first thing your local council will claim

This tax levies the increase in land value from when you bought until you sell.

It works like this: the local council calculates how much the cadastral value of the land (not the building) has increased and charges you a percentage, even if you lost money on the sale.

For example:
You bought an apartment in 2005 with a cadastral land value of €25,000. In 2025, you sell it and that value is €40,000. That difference is the base. The tax can vary between 15% and 30% of that gain.

What to do:
Ask your local council for the exact calculation. If there was no gain, you can request an exemption. And remember: this tax is paid by the seller, unless you agree otherwise in the contract.

2. IRPF (Personal Income Tax): The tax that takes the big chunk

When you sell a home, the State assumes you've made money. And if there's a gain, you pay IRPF.

How is it calculated?
Selling price minus purchase price, plus acquisition costs and justified reforms.

Practical example:

• Purchase price in 2010: €180,000
• Expenses: €10,000
• Renovations: €15,000
• Selling price in 2025: €250,000
  → Gain: €45,000

IRPF brackets 2025:

• Up to €6,000 → 19%
• From €6,000 to €50,000 → 21%
• From €50,000 to €200,000 → 23%
• From €200,000 to €300,000 → 27%
• More than €300,000 → 30%

Recommendation:
Keep invoices for purchase, renovations, and expenses. Without them, Hacienda (the Spanish Tax Agency) won't let you deduct anything.

3. What if it's your main home? You can avoid IRPF

There are two legal ways not to pay IRPF on the gain:

1. Reinvestment in another main home (within 2 years).
   If you use the proceeds to buy another main home, you are exempt.
2. Sale by individuals over 65.
   If you sell your main residence at 65 or older, you pay nothing.

Key conditions:

• Having lived in the house for at least 3 years (registered residency).
• Reinvesting in another main home within 24 months.

Tip:
If you meet these conditions, keep supporting documents and make sure to report correctly on your tax return.

4. Inherited or donated property: The tax nuance many ignore

When you sell an inherited or donated house, the acquisition price is the value declared in the inheritance or donation, not what the previous owner paid.

For example:
You inherited a house in 2016 with a declared value of €120,000, and now you sell it for €200,000. That difference (€80,000) is taxed as a capital gain.

To avoid errors:

1. Consult the acceptance of inheritance deed.
2. Include inheritance tax as part of the value.
3. Justify improvements with invoices if there were any.

Watch out:
If the declared value was very low, the tax bill will be higher.

5. Property Tax (IBI): Who pays and how

Although not directly part of the sale, IBI can lead to disputes if not clarified.

By default, it's paid by the owner as of January 1st of the current year.
But it's common to prorate it in the purchase agreement.

How to avoid misunderstandings?
Include a clause like this:

“The IBI corresponding to the current year shall be prorated between the parties according to the number of days of possession.”

A small detail that can save you a lot of arguments.

6. Are you a foreigner? Mandatory 3% retention

If you are not a tax resident in Spain, the buyer must withhold 3% of the price and pay it to Hacienda (form 211).

Real example:
You sell for €300,000. The buyer pays you €291,000 and pays €9,000 directly to the Tax Agency.

You can then claim that money back by submitting form 210 within 4 months.
If you don't, you lose that 3%.

Recommendation:
Hire a tax advisor to prepare form 210. This way you can recover that amount or avoid duplicate payments.

7. How to legally reduce what you pay

There are several deductible expenses that reduce your taxable gain. But you need proof.

You can deduct:

• Notary, registry, and management fees from the original purchase
• Purchase taxes (ITP or VAT)
• Renovations with invoices
• Real estate agent commission
• Municipal Capital Gains Tax (Plusvalía municipal)
• Energy performance certificate

Do this now:
Keep all documents in a physical or digital folder. Without invoices, Hacienda does not allow deductions.

8. Practical template for calculating your tax liability (with real example)

Here's an easy-to-use template to find out how much you might pay (or save):

Template:

1. Selling price: _______
2. Purchase price + expenses + renovations: _______
3. Capital gain (1 - 2): _______
4. Applicable IRPF bracket (see table): _______
5. Estimated Municipal Capital Gains Tax (Plusvalía): _______
6. Other deductible expenses (agency, certificate, etc.): _______
7. Do you meet exemption requirements? Yes / No
8. Final result (net after taxes): _______

Realistic example:
Lucía bought her apartment in Calpe in 2012 for €160,000. She is now selling it for €240,000.
She paid €9,600 in ITP, €1,500 in notary fees, carried out renovations for €12,000, and will pay €6,000 in real estate commission.

• Sale: €240,000
• Purchase + expenses + renovations: €183,100
• Gain: €56,900
• IRPF: 21% on €43,100 + 23% on €6,900 ≈ €9,051
• Plusvalía: €3,200
• Real estate expense: €6,150

But since she is reinvesting in another main home, she will not pay IRPF. Only the municipal capital gains tax.
And thanks to keeping invoices, she can deduct other expenses.