Taxes and Expenses when selling a Property in 2025: What are they?

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1. EXPENSES BEFORE SELLING THE PROPERTY

Before finalizing the sale, certain documents must be processed:

* Energy Certificate (€60-130) → Mandatory since 2013. Indicates the property's energy efficiency.
* Certificate of Occupancy (LPO) (€60-160) → Required in some regions to certify that the property meets minimum habitability standards.
* Simple Note (€3.64-9.2) → Provides legal information about the property (mortgages, encumbrances, etc.).
* Mortgage Cancellation (€400-1,000) → If the property has a mortgage, it must be canceled before selling.

2. EXPENSES DURING THE SALE

Additional costs arise when finalizing the transaction:

* Earnest Money Contract (Variable) → Not mandatory but protects both parties. It can be drafted for free or with legal assistance.
* Notary Fees (Variable) → Public deed of sale. Typically paid by the buyer, but the seller covers the original deed.
* Real Estate Agency Fees (Variable) → If selling through an agency, their commission is usually 5% of the sale price.

3. TAXES AFTER THE SALE

* Income Tax (IRPF) → Paid on the profit made from the sale. The 2025 tax brackets are

Profit Earned (€)	IRPF Rate
Up to 6,000	19%
6,000 - 50,000	21%
50,000 - 200,000	23%
200,000 - 300,000	27%
Over 300,000	28%

Exemptions: You won’t pay IRPF if:

- You are over 65 years old and selling your primary residence.

- You reinvest the proceeds in another primary residence.

- You are in a situation of severe dependency.

* Municipal Capital Gains Tax → A local tax on the land’s increased value since the purchase. It is calculated using:

- Real Method → Based on the difference between purchase and sale prices.

- Objective Method → Based on annual coefficients applied to the cadastral value.
Not payable if the property is sold for less than its purchase price.

* Property Tax (IBI) → An annual tax paid by whoever owns the property as of January 1 of that year.

* Taxes for Non-Residents → If the seller does not reside in Spain, the buyer must withhold 3% of the sale price and pay it to the Spanish tax authorities.

4. DEDUCTIBLE EXPENSES ON THE TAX RETURN

The following can be deducted:

* Real estate agency commission
* Municipal capital gains tax
* Mortgage cancellation costs
* Renovations and improvements made before the sale
* Taxes paid when purchasing the property (ITP or VAT)