Property taxes in Spain – Here you will find the latest update about the “Plusvalía” tax:
Property taxes in Spain: on selling property in Spain, you are liable for two taxes –
- Capital Gains Tax (CGT)
- Plusvalia tax.
The first tax is national and set by the government.
The second one, is a devolved competency to municipalities (read town halls). They are free to set the rate within a sliding scale supplied by the government. The government will be moving the goal posts (read adjusting the coefficients) as from the 1st of January 2023 in the new budget law. In plain English, town halls will have free rein to increase by as much as 50% Plusvalia tax as from next year.
If you are selling property in Spain, you should seriously factor this in on negotiating a sales price. Unlike CGT, there is no escape from paying Plusvalia tax. The reason is because buyers practice a retention on all non-resident sellers, so no matter what the tax is always paid to the town hall.
The importance of this cannot be understated if you are a seller. The smart thing would be to sell now, during 2022, even accepting a small discount on the sales price, as effectively you are going to pay this tax increase anyway on selling it as from next year onwards.
So next time you are negotiating with a buyer the asking price, keep my tip in mind. You may as well knock off a few thousand euros in the sales price to secure a sale now, during 2022, and save yourselves paying thousands more in 2023, and beyond! You’re welcome.
Source: Idealista. Photo by Pexels.
