Tax on buying and selling property on the Costa del Sol
Before you sign at the notary it helps to know what you will really pay. We calculate the taxes, costs and retentions, and settle everything that follows.
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If you are buying: what you will pay
It depends on whether the property is new or resale.
On a new build you pay VAT, which for housing is 10%, plus Stamp Duty, which in Andalusia is generally 1.2%.
On a resale you pay Transfer Tax. Andalusia has applied a general rate of 7% since the 2021 reform, with reduced rates for certain buyers and situations.
On top of that come notary, land registry, agency fees and, if there is a mortgage, the valuation. As a practical rule of thumb, budget between 10% and 13% of the price for taxes and costs.
If you are selling as a non-resident: the 3% retention
The buyer is legally required to retain 3% of the declared price and pay it to the Spanish tax office on Form 211 within one month. It is not optional or negotiable: if the buyer fails to do it, the buyer becomes liable.
That 3% is a payment on account of your capital gain. You then have four months from the deed to file Form 210 with the real gain, calculated as the difference between the sale value and the acquisition value, adding to the latter the costs and taxes you paid when you bought.
If the actual tax is lower than what was retained, you claim the difference back. If it is higher, you pay the balance. Separately there is the municipal capital gains tax on the increase in land value, which the seller pays.
Our work around the signing
BEFORE
Advance report
A full calculation of the taxes and costs for your situation and the property, so you know the final figure before committing.
DURING
Coordination with the notary
Reviewing the draft deed, funds, NIEs for both parties and checking that the retention is applied correctly.
AFTER
Settlements
Transfer tax or stamp duty, municipal capital gains, the Form 210 gain and changes of name at the cadastre and utilities.
Frequently asked questions
Can the buyer keep the 3% if the seller objects?
It is not a question of choice: the law imposes the retention when the seller is non-resident, and if the buyer does not apply and pay it, the property itself becomes liable for the tax.
What is a value check?
The tax office can review the value declared in the deed against the cadastral reference value. If the declared figure is lower, it can issue a supplementary transfer tax assessment. That is why the reference value should be checked before signing.
Does the seller always pay the municipal capital gains tax?
In a sale, yes, unless agreed otherwise, and unless the seller is non-resident, in which case the buyer becomes substitute taxpayer. Another point worth settling before signing.
Can I offset the renovation I did when I sell?
Improvements that increase the value of the property add to the acquisition value and reduce the gain, provided you can evidence them with complete invoices. Ordinary maintenance and repairs do not.
You may also need
The annual return once you own it.
If you plan to let it out.
If the property comes through an estate.
Cost of the advance report and settlements.
Talk to us before you sign
We give you the real tax and cost figure for your transaction before you commit to anything.