Capital Gains Tax When Selling Spanish Property (2026)

The cleanest way to see how this works is a worked example. Take a UK couple who bought a Costa Blanca villa for EUR 300,000 in 2009 and are selling it for EUR 500,000 in 2026. They live in the UK and are non-resident in Spain. Both are over 65.

The headline gain looks like EUR 200,000. The taxable gain is smaller, because Spain lets you deduct the costs you originally paid to acquire the property and the costs you're paying to sell it, plus documented capital improvements you made along the way.

The 3% withholding doesn't add to this total. It's an advance payment of the CGT, taken at the notary and forwarded to Hacienda. On a EUR 500,000 sale that's EUR 15,000. Because the actual CGT here is EUR 30,400, the seller still owes another EUR 15,400 when they file their return the year after completion.

If the sums had gone the other way - say the property barely gained in value - the same 3% withholding would have been more than the CGT due. In that case the seller files a refund claim and waits eight to fourteen months to get the difference back.

The single biggest lever you have over your CGT bill is documented deductions. Spain draws a sharp line between improvements that increased the property's value and maintenance that just kept it working. Improvements come off the gain. Maintenance does not.

For every cost you want to claim, Hacienda expects an invoice with the supplier's NIF, your name, the date, and a clear description of the work. Bank transfers are strongly preferred. Cash receipts are routinely rejected. Sellers who paid handymen in cash for a decade often discover at completion that they can't deduct any of it.

Three points trip up British sellers more than any others. None of them are hidden, but they're easy to miss if you've only sold property in the UK before.

Plusvalia is separate from CGT. It's a municipal tax on the increase in cadastral land value during your ownership and is paid directly to the town hall, normally within 30 days of completion. Costa Blanca rates sit around 3.6-3.75% of the assessed land-value gain. Since 2021, sellers can choose between the formula method and the real-gain method - your lawyer should run both and pick the lower one. If the land value didn't go up, the tax is zero.

The 3% withholding is an advance, not a final tax. The buyer's lawyer is legally required to hold back 3% of the sale price (Form 211) and pay it to Hacienda. As the seller, you then file Form 210 by the end of the third month after completion. If your real CGT is less than the 3%, you claim a refund. If it's more, you pay the difference. Sellers who think they're done after the notary often get a tax bill 18 months later.

The UK can still tax the same gain. The Spain-UK double taxation convention survived Brexit, so HMRC will let you offset the Spanish CGT against UK CGT under Foreign Tax Credit Relief - but you don't escape UK tax altogether. UK property CGT runs at 18% in the basic rate band and 24% in the higher band. In practice you end up paying the higher of the two effective rates. Report the disposal to HMRC within 60 days of completion if any UK tax is due. For the Spanish side, see our full capital gains tax guide and the broader selling process walkthrough.