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EXPENSES WHEN SELLING YOUR PROPERTY: Online Capital Gains Tax Calculator

EXPENSES WHEN SELLING YOUR PROPERTY: CALCULATE THE CAPITAL GAINS TAX

A few months ago, we published this article to explain one of the most important expenses when selling a property: the Capital Gains Tax. The article was very complete, but at the same time, it turned out to be complicated to understand if you are not familiar with these types of calculations.

For this reason, at Agrucasa, we came up with the idea of creating a Capital Gains Tax calculator from scratch, using AI to generate the code. The result is a quite reliable and very easy-to-use tool. In just a few clicks, you can calculate the tax you will have to pay when selling your property.

What is the Capital Gains Tax when selling a property?

If you don't know what Capital Gains Tax is, I'll explain it briefly. Its abbreviation stands for PERSONAL INCOME TAX. When selling a property, it is the tax you must pay on the profit obtained. In this case, it is based on the gain you make when selling your property. It’s very simple: if you bought a property at a certain price and sell it for a higher amount, you make a profit, and the Tax Agency will require a percentage of that profit, which you will have to pay when filing your tax return.

If you do not make a profit on the sale, you won’t have to pay anything.

What if you are not a tax resident in Spain?

If you are not a resident, a 3% withholding will be applied to the sale price when selling your property. If you sold at a loss, you can request a refund of that 3%. Simply put, when you sell your house, the buyer will withhold 3% and submit it using Form 211, and you will need to submit Form 210 to request the refund. On the other hand, if you made a profit exceeding the retained 3%, you will have to pay the corresponding difference.

At Agrucasa, we offer you a tool that allows you to estimate the Capital Gains Tax you will have to pay when selling your property.

The tool is designed to cover most situations, but each case may have its particularities. Therefore, we recommend consulting with a tax advisor to obtain an exact calculation and ensure that all applicable exemptions or reductions are correctly applied.

IRPF Calculator for Properties

Purchase Date: Sale Date: Purchase Price (€): Sale Price (€): Acquisition Expenses (€): Renovation or Other Deductible Expenses (€): Sale Expenses (€): Check if it's your primary residence Check if you are not a tax resident in Spain

EVERYTHING YOU NEED TO KNOW ABOUT INCOME TAX (IRPF) WHEN SELLING YOUR PROPERTY IN 2025

At Agrucasa, we want to offer you this article, which we have written with great enthusiasm, as we believe it can be very helpful in understanding how income tax (IRPF) works when selling a property in Spain. Our goal is to provide you with as much information as possible on the subject. We hope it’s not too long, but it’s important for us to cover as many possible situations as we can.

If you have sold a property in Spain or are considering selling one, you will need to cover several expenses that can significantly reduce the net profit of the transaction. One of the most important is the IRPF, which directly affects the profit obtained. This tax is applied to the difference between the selling price and the purchase price of the property, taking into account certain expenses and improvements made to the property. Below, we explain how IRPF is applied to property sales in 2025.

HOW IS INCOME TAX (IRPF) CALCULATED WHEN SELLING A PROPERTY?

IRPF is calculated based on the profit obtained, meaning the difference between what you paid for the property and what you received when selling it. This profit is divided into brackets, and a percentage is applied according to the bracket it falls into.

Below, we show you the tax brackets for 2025:

Up to €6,000: 19% tax applies
From €6,000 to €50,000: 21% tax applies
From €50,000 to €200,000: 23% tax applies
More than €200,000: 26% tax applies

It is important to note that these percentages are not applied to the total sale price but to the profit obtained.

Practical Example

Suppose you sell your property for €300,000 and you bought it for €200,000, giving you a profit of €100,000. According to the IRPF tax brackets for 2025, the profit would be taxed as follows:

The first €6,000 is taxed at 19%, meaning you would pay €1,140.
From €6,000 to €50,000, a 21% tax applies, which would amount to €9,240.
The next €50,000 is taxed at 23%, meaning €11,500.

In total, you would pay €21,880 in IRPF, unless you apply any of the exemptions we will discuss later.

Selling a property can bring a significant tax burden, but knowing the IRPF brackets and possible exemptions will help you calculate your costs and manage the process more effectively.

TAX IMPLICATIONS OF INCOME TAX (IRPF) FOR NON-RESIDENTS SELLING PROPERTIES IN SPAIN

Selling a property in Spain as a non-resident involves several tax obligations that differ from those of residents due to a different tax regime. Below, we will discuss in detail the implications of the Non-Resident Income Tax (IRNR) and other important tax considerations.

3% Retention

The buyer of a property owned by a non-resident must withhold and deposit 3% of the sale price to ensure that the seller fulfills their tax obligations as a non-resident. The buyer must make this retention and pay it using Form 211.

Non-residents must declare and pay tax on capital gains using Form 210, which is submitted to the Spanish Tax Agency.

In some property sales, when the buyer withholds the 3% from the non-resident seller and has to submit Form 211 to pay it, they may need someone to process it for them, either the notary handling the tax payments or a legal office. This means an additional expense for submitting the tax, as the person managing the submission of Form 211 will charge for their services. This can create a dispute over who is responsible for covering this extra cost.

What does the Spanish Tax Agency say? The buyer must withhold and deposit the tax, meaning that it is the buyer's responsibility to submit Form 211.

What tax rates apply to capital gains for non-residents?

19% for residents of the European Union (EU) and the European Economic Area (EEA).
24% for non-residents outside the EU/EEA.

If you sell a property at a loss or with minimal capital gain and want to request a refund of the 3% withheld by the buyer, you must apply for a refund using Form 210. This tax must be paid within four months following the sale date.

DEDUCTIBLE EXPENSES WHEN SELLING A PROPERTY FOR RESIDENTS AND NON-RESIDENTS

When selling a property, you should not only consider the selling price but also the expenses you can deduct to correctly calculate your capital gain. These expenses can reduce the impact of income tax (IRPF), so it is important to be aware of them.

Repairs and Improvements

If you have carried out repairs or improvements that increased the value of the property, these expenses can be deducted. It is important to keep invoices that justify these expenses, as they can only be considered if properly documented. Additionally, improvements must have been made in recent years and be duly recorded.

Mortgage Cancellation Expenses

If you still had a mortgage on the property and canceled it at the time of sale, the associated expenses can also be deducted. This includes notary fees, registry fees, and any penalty you may have had to pay for early loan repayment.

Acquisition Expenses

Another deductible expense is related to the acquisition of the property, such as the taxes paid when purchasing it, like the Property Transfer Tax, as well as notary and registry fees associated with the purchase.

How to Calculate Capital Gain

To calculate capital gain and determine what portion is subject to income tax (IRPF), the formula is quite simple:

Capital Gain = Selling Price - (Acquisition Price + Justified Expenses)

Let's consider the following example:

Selling price: €300,000
Acquisition price: €200,000
Improvement expenses (with invoices): €20,000
Mortgage cancellation expenses: €2,000
Other deductible expenses: €3,000

The capital gain would be:

€300,000 - (€200,000 + €20,000 + €2,000 + €3,000) = €75,000

This means that your capital gain would be €75,000, and the applicable income tax (IRPF) would only be calculated on this amount.

It is important to keep all invoices and documents supporting these expenses, as they will help justify deductions before the tax authorities.

I would like to point out that the tax authorities should consider other expenses that should be deductible, such as community fees, which are currently not taken into account, including community fees and special assessments, as they are part of the building's maintenance.

For example, a property owner who has paid €300 per year in community fees for 30 years has incurred a significant expense, not to mention any special assessments that may have been imposed over those 30 years.

TAX BENEFITS AND EXEMPTIONS FOR NON-RESIDENTS

Tax Treaties and International Double Taxation Deduction:

Spain has tax treaties with several countries to avoid double taxation. These treaties determine which country has the right to tax certain income, including capital gains.

For example, the tax treaty between Spain and the United Kingdom allows Spain to tax capital gains, but the taxpayer can obtain a credit for the tax paid in Spain when filing taxes in the United Kingdom, thus avoiding being taxed twice on the same income.

TAX BENEFITS AND EXEMPTIONS FOR RESIDENTS

Although personal income tax (IRPF) on capital gains can be significant, there are certain exemptions and benefits that can help you reduce or even eliminate your tax burden. Here are some of the most relevant ones:

People over 65 years old: Residents aged 65 and older who sell their primary residence may be exempt from capital gains tax, as long as they have lived in the property for a continuous period of at least two years before the sale date.
If the money is not reinvested in another property, in order to qualify for this exemption, the total amount obtained from the sale must be used within six months to establish a life annuity in their favor, under the conditions established by law. The maximum total amount that can be used to establish life annuities for this purpose is 240,000 euros.
People in a situation of severe or high dependency: If you are classified as a person with severe or high dependency according to the Law on the Promotion of Personal Autonomy and Care for Dependent Persons and you sell your primary residence, you will be exempt from paying capital gains tax.
Reinvestment in a primary residence: If you reinvest the entire sale amount in the purchase of a new primary residence, you may be exempt from paying IRPF on that gain. This exemption applies if the reinvestment is made within two years before or after the sale, whether in Spain or another country within the European Union or the European Economic Area, as long as it becomes your main residence.
If the reinvested amount is lower than the total received from the sale, only the proportional part of the capital gain corresponding to the reinvested amount will be exempt from taxation. The law does not establish any minimum or maximum sale amount, nor does it consider whether you own multiple properties—what matters to qualify for this deduction is that it is your primary residence.
People with Disabilities: There is a personal and family minimum allowance that increases depending on the degree of disability of the taxpayer, their ascendants, or descendants. This minimum reduces the taxable base, decreasing the amount on which taxes are calculated.
The amounts of this allowance vary depending on the degree of disability and the need for assistance from third parties or mobility difficulties.
Autonomous communities may establish specific deductions for people with disabilities that can be applied to the total IRPF amount.
It is important for people with disabilities to properly inform themselves about the available tax benefits and provide proof of their disability to take advantage of them.

Partial Exemptions

Urban properties acquired between May 12, 2012, and December 31, 2012, may qualify for a 50% exemption.

The 50% exemption on capital gains for properties acquired between May 12, 2012, and December 31, 2012, was a measure aimed at encouraging real estate transactions during an economic crisis, with the goal of revitalizing the real estate market.

To qualify for the 50% exemption, the property must have been used as the seller's primary residence for a minimum period. Generally, a property is considered a primary residence if the seller has lived in it continuously for at least three years before the sale. However, it will still be considered a primary residence if, despite not meeting this period, certain circumstances arise that necessarily require a change of residence.

It is advisable to consult a tax advisor because, depending on the autonomous community, this reduction may vary, or there may be other conditions established by regulations, such as limits on the property's value or the amount of capital gain.

Reducing Coefficients or Abatement for Properties Acquired Before 1994

If you purchased your home before December 31, 1994, you may benefit from reducing coefficients when calculating capital gains, which can reduce the taxable amount.

Why is this reduction applied? Because the value of money has changed over time, and properties acquired many years ago have been affected by inflation.

Real Estate and Reducing Coefficients:

Coefficient: 11.11% for each year of ownership exceeding two, from acquisition until December 31, 1996.

Reduction Percentages by Years of Ownership until December 31, 1996:

Up to 2 years: 0% (Purchased between 12-31-1994 and 12-31-1996)
Up to 3 years: 11.11% (Purchased between 12-31-1993 and 12-30-1994)
Up to 4 years: 22.22% (Purchased between 12-31-1992 and 12-30-1993)
Up to 5 years: 33.33% (Purchased between 12-31-1991 and 12-30-1992)
Up to 6 years: 44.44% (Purchased between 12-31-1990 and 12-30-1991)
Up to 7 years: 55.55% (Purchased between 12-31-1989 and 12-30-1990)
Up to 8 years: 66.66% (Purchased between 12-31-1988 and 12-30-1989)
Up to 9 years: 77.77% (Purchased between 12-31-1987 and 12-30-1988)
Up to 10 years: 88.88% (Purchased between 12-31-1986 and 12-30-1987)
Up to 11 years: 100% (Purchased on 12-31-1985 or earlier, until 12-30-1986)

The related reduction percentages do not apply in any case to capital losses or to the portion of capital gains generated from January 20, 2006, until the date of transfer.

EXAMPLE OF REDUCING COEFFICIENT APPLICATION

Let's suppose the following:

Real estate acquisition date: January 1, 1990.
Acquisition price: €100,000
Real estate sale date: January 1, 2025.
Sale price of the real estate: €400,000
Improvement made in 2010 at a cost of: €50,000

Capital Gain Calculation Without Applying Reducing Coefficients

Acquisition Price plus improvements made to the property: €100,000 + €50,000 = €150,000
Capital Gain: €400,000 - €150,000 = €250,000

Calculation of the Different Capital Gain Percentage Types Applicable Before January 20, 2006, and After January 19, 2006

Since the reduction percentages do not apply to the capital gain generated from January 20, 2006, until the date of transfer, it is important to know how to calculate it.

1. Calculation of Days:

From the purchase date on January 1, 1990, to January 19, 2006:
16 years X 365 days + 19 days in January = 5,859 days

From the purchase date on January 1, 1990, to the sale date on January 1, 2025:
35 years X 365 days = 12,775 days

2. Calculation of Capital Gain:

Gain generated before January 20, 2006:
Capital gain €250,000 X 5,859 days = 1,464,750,000 / 12,775 days = €114,657

Gain generated from January 20, 2006:
€250,000 - €114,657 = €135,343

Application of Reducing Coefficients

For real estate properties, the reducing coefficient is 11.11% for each year of ownership exceeding two from acquisition until December 31, 1996.

Reduction Calculation:

Years of ownership until December 31, 1996: 6 years
Years considered for reduction: 6 years - 2 years = 4 years
(The law states that a reducing coefficient of 11.11% applies for each year starting from the second year, meaning the coefficient counts from the second year onwards. Since 6 - 2 = 4 years, checking the table, 6 years correspond to 44.44%)
Reduction: 11.11% X 4 years = 44.44%
€114,657 X 44.44% = €50,953

Applying the reduction obtained to the gain:
€114,657 - €50,953 = €63,704

Total Capital Gain

Gain before January 20, 2006: €63,704
Gain from January 20, 2006: €135,343

Total Gain: €63,704 + €135,343 = €199,047

Application of the Different IRPF Brackets to the Gain of €205,980:

€6,000 X 19% = €1,140
€44,000 X 21% = €9,240
€149,047 X 23% = €34,280

Total IRPF: €1,140 + €9,240 + €34,280 = €44,660

Important: To be able to apply the reducing coefficients to the capital gain from the sale of a property acquired before December 31, 1994, the total transfer value of all assets sold from January 1, 2015, to the current transfer date must not exceed 400,000 euros.

Remember that tax regulations are constantly evolving, so it is essential to stay informed about the latest updates.

I would like to comment that, from my point of view, the reducing coefficients help lower the tax burden significantly, but I find them outdated. Every year since January 2006, inflation continues to rise, and the value of money decreases, making these coefficients less effective as time passes.

I also have to say that I do not fully understand where these coefficients originated from and why they have become less effective over time. From my perspective, if we consider an annual inflation rate of 1.5% to 2%, it would make sense to calculate the accumulated effect of inflation on the property's value.
For example, if a property owner purchased a home 30 years ago, it would be fair to take those 30 years and multiply them by the annual 1.5% inflation rate. In this case, we would have a reducing coefficient of 45%, which would be much more realistic and aligned with the true value increase due to inflation.

We hope this article has been helpful and recommend consulting a specialized tax advisor to ensure that you correctly apply all deductions and comply with current regulations, avoiding potential future issues.

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