Taxes Paid by the Seller of Real Estate in Spain in 2023
Taxes Paid by the Seller of Real Estate in Spain in 2023
Any real estate transaction always has two sides. One of them, the most pleasant, is gaining financial profit from the sale. The second side, equally important, is payment of all necessary taxes associated with this procedure.
The seller’s expenses include taxes, which must be paid in a timely manner and taken into account in the relevant tax return. These taxes include Income Tax (el IRPF), Capital Gains Tax (la Plusvalía) and Property Tax (IBI).
Let’s consider each of them in more detail.
Income Tax – el IRPF
When real estate is sold, capital gains resulting from the transaction are subject to the appropriate tax. This should be reflected in the next year’s income statement of the seller.
The IRPF in selling real estate is calculated from the difference between the initial price at which the property was acquired in the past and the final sale price. We will review the changes of the IRPF in 2023 in the corresponding table below.
Please note that there are a number of personal income tax exemptions that allow you to avoid these costs. The law provides for the following benefits:
- Exemption from payment for usual home, if this money will be used to reinvest in buying another one (Exención por reinvertir en vivienda habitual).
- Exemption from payment for the persons over 65 years old who sell their main housing in order to obtain a lifetime annuity (Exención por ser mayor de 65 años y vender la vivienda habitual a contratar una renta vitalicia).
- Exemption from payment when the transfer of property is carried out through a dation in payment (Exención por entregar la vivienda en dación de pago).
Municipal Capital Gains – la Plusvalía
Municipal Capital Gains is a tax that is paid within the first 30 business days after the sale of a property. The collection of this tax is administered by the local authorities, as it must consider the possible increase in the value of the land on which the real estate object is located.
Municipal capital gains are paid in accordance with tax rates and capital gains set by the local city council. Therefore, in different municipalities of Spain, the amount of this tax may vary.
Property Tax – (IBI)
This tax is paid once a year for home ownership and is municipal in the nature.
When real estate is sold, the payment of IBI is the responsibility of the person who is the owner of this property as of January 1 of the current year.
However, the law also obliges the buyer to pay part of the tax. This payment can be allocated based on the time each party owned the property during the year of the transaction. Subsequently, the payment is fully transferred to the new owner.
What are the Deadlines for Paying Taxes on the Sale of Real Estate?
Each tax has its own due dates. Below we provide information on each of them.
- Income Tax. It is paid one year after the sale, together with the submission of the relevant declaration.
- Municipal Capital Gains Tax. It is paid within 30 working days after the sale of the property, although sometimes the terms may vary (you need to check with your local city hall).
- Property Tax. It has to be paid every year just for the mere possession of the property. When selling a property, the amount you have to pay in this year can be shared with the buyer depending on the time each of you owned housing.
Changes in the Payment of Personal Income Tax When Selling Real Estate in 2023
When real estate is sold, capital gains or losses are included in the relevant income statement. Thus, with the approval of the new General State Budgets, a number of innovations on property taxes are being introduced in 2023.
The new changes presented below relate to tax rates and include two new sections in the taxable base for the savings:
| Income Tax Line (IRPF) | Tax Rate (2022) | Tax Rate (2023) |
| Up to 6,000 EUR | 19 % | 19 % |
| From 6,000 to 50,000 EUR | 21 % | 21 % |
| From 50,000 to 200,000 EUR | 23 % | 23 % |
| From 200,000 to 300,000 EUR | 26 % | 27 % |
| More than 300,000 EUR | 26 % | 28 % |
If you decide to sell your property, then now you know what taxes should be paid when selling real estate in 2023. In our company, there are real professionals specializing in the effective sale of properties. We duly control every stage of this process and, if necessary, individual legal and consulting assistance can be offered for you.
