When selling a property, there are various cost that you need to account with. Plus Valía tax (meaning ‘extra value’) is levied by the local council on the change in value of the property since you bought it. It is calculated based on the cadastral value of the property and takes several factors into consideration including:

The length of time you have owned a property – the longer your ownership, the higher the tax.

The size of the property – large properties pay more than smaller ones.

The property’s location within the municipality – properties in areas with more municipal services and facilities attract higher levels of plus valía tax.

Agency fees are also due to be paid by the seller and they range from 3%-5% of the selling price. This can be negotiated with the buyer as well as the other agents involved.

Capital gain fees – The main home exemption

If the amount of money that you earn from the sale of the property will be reinvested into the purchase of a new one, and you will use this new house or flat as your new home, you don’t need to pay capital gains tax. That simple. This is what we call the main home exemption. You have a period of 2 years to reinvest your profits.