Selling a property does not only involve finding a buyer and signing the deed before a notary. In a real estate transaction there are also taxes and mandatory costs that the owner must take into account before completing the sale. Knowing them in advance helps to plan the operation properly and avoid financial surprises when the time comes to formalize the transaction.
In the Valencian Community, as in the rest of Spain, the seller usually assumes several taxes related to the sale of the property. Some are state taxes and others are municipal, and their amount may vary depending on the value of the property, how long it has been owned, and the profit obtained from the sale.
In this guide, our real estate expert Kurt Op de Beeck clearly explains what taxes are paid when selling a property in the Valencian Community, how they are calculated and in which cases exemptions or reductions may apply.
What taxes does the seller pay when selling a property?
When a property is sold, the owner must assume certain taxes that are common in any real estate transaction. In Spain, these taxes are generally divided into municipal taxes and state taxes, and each one is applied for a different reason related either to property ownership or to the profit obtained from the sale.
Knowing these taxes before putting a property on the market is essential to correctly calculate the profitability of the operation. In addition, understanding the tax obligations in advance helps prepare the necessary documentation and avoid unexpected issues during the sales process. Below we explain the main taxes that the seller should consider when selling a property in the Valencian Community.
Property Tax (IBI)
The Property Tax (IBI) is a municipal tax that is paid annually for owning a property. Although it is not a tax specifically related to the sale, the seller must be up to date with its payment at the time the property is transferred.
Legally, the IBI corresponds to the person who appears as the owner of the property on January 1st of the current year. However, in many real estate transactions it is common for buyer and seller to agree to divide the amount proportionally according to the date of the sale.
The amount of IBI depends on the cadastral value of the property and the tax rate applied by each municipality, which means it can vary from one town to another. Before selling a property, it is advisable to ensure that this tax has been paid, as the notary usually requests the latest receipt to formalize the deed of sale.
Municipal capital gains tax (Plusvalía municipal)
The municipal capital gains tax, officially known as the Tax on the Increase in Value of Urban Land, taxes the increase in the value of urban land from the moment the property was purchased until it is sold.
This tax is municipal and its amount mainly depends on two factors: the cadastral value of the land and the length of time the property has been owned. In general, the longer the property has been owned, the higher the potential amount of the tax.
Currently there are different calculation methods, and the tax only has to be paid when there has actually been a real increase in value. Many municipalities even offer online calculators to estimate the approximate amount to be paid.
For this reason, it is advisable to calculate the municipal capital gains tax before selling a property in order to have a clear estimate of the tax cost associated with the transaction.
Personal Income Tax (IRPF) on the sale of a property
Another important tax when selling a property is Personal Income Tax (IRPF), which must be declared in the income tax return for the year in which the property is sold. This tax applies to the capital gain obtained from the transaction.
The gain is calculated in a relatively simple way: the sale price is taken and the purchase price is subtracted, along with certain related expenses such as acquisition taxes, notary fees, or some investments made in the property.
In the case of non-resident owners, there is a 3% withholding on the sale price, which the buyer must pay to the tax authorities as an advance payment of the tax.
There are also situations where the seller may be exempt from paying IRPF, for example when the proceeds are reinvested in the purchase of a primary residence or in certain cases involving owners over the age of 65. Analyzing each situation individually is key to properly planning the sale.
Other common costs when selling a property
In addition to the main taxes, there are other costs associated with selling a property that should also be considered. Among the most common are the energy certificate, possible community certificates, administrative costs or certain prorated payments related to services or community fees.
Although these costs are usually lower than the main taxes, they form part of the overall cost of the transaction. Taking them into account from the beginning helps to calculate more accurately the real profit obtained from the sale of the property.
Selling a property in the Valencian Community with professional advice
Selling a property involves not only finding a buyer but also understanding the taxes and obligations associated with the transaction. Having professional advice can help interpret each tax correctly, plan the sale more effectively and avoid tax mistakes that could cause problems later.
At Cumbre del Sol Pre-Owned, our real estate team supports property owners throughout the entire selling process. Thanks to our experience in the local market, we help explain the costs involved, prepare the necessary documentation and manage the sale safely and efficiently.
If you are thinking about selling your property and want to clearly understand what taxes are paid when selling a property in the Valencian Community, you can contact our team of experts for personalized advice. We will be happy to review your case and help you plan the sale with confidence and peace of mind.
