The Tax Agency has issued an important warning to all those who have sold a flat or house in 2024. This reminder is not minor: if the transaction is not declared correctly, the taxpayer may face financial penalties and tax complications that could have been avoided with proper planning.
In this article we explain the essentials you need to know if you have sold (or plan to sell) a property this year, and how it affects personal income tax and other related taxes.
What taxes affect the sale of a property?
When selling a property in Spain, the seller has to take into account three main taxes:
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IRPF (Personal Income Tax): The gain obtained from the sale of the home is considered a capital gain, and must be included in the income tax return for the corresponding financial year. It is calculated as the difference between the sale price and the purchase price (adjusted for expenses and investments made).
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Plusvalía Municipal (Impuesto sobre el incremento del incremento del valor de los terrenos de naturaleza urbana): This tax is paid to the local council and is levied on the increase in value of the land from the time it was bought until it is sold. The formula has changed in recent years, and its calculation depends on several factors.
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IBI (Real Estate Tax): Although not directly linked to the sale, it is usually apportioned between buyer and seller according to the length of possession of the property in the tax year.
In which cases could you be exempt from paying personal income tax?
The regulations provide for important tax exemptions in specific cases. Among the most noteworthy:
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Reinvestment in a primary residence: If you reinvest the total amount obtained from the sale in a new primary residence, you may be exempt from paying tax on the capital gain, provided that you comply with the deadlines and conditions established by the Tax Authorities.
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Over 65s: They are exempt if they sell their main residence, without the need for reinvestment. They can also benefit from other exemptions if the amount is used to constitute an insured life annuity.
What should you do if you have sold a property this year?
Review your IRPF 2024 tax return, correctly including the capital gain. Check whether you meet the requirements to qualify for an exemption. Consult a tax advisor if you have any doubts about how to pay tax or what documentation you need. Prepare all the supporting documents for the transaction: deeds, notary fees, renovations carried out, etc.
What happens if you don’t?
Not declaring a home sale or declaring it incorrectly can lead to penalties, surcharges for late declarations or summons from the Tax Agency. If the tax office detects omissions or errors, it can reclaim the untaxed amount with interest.
At Quality Keys Inmobiliarios we help you to get it right
Many homeowners are unaware of how to correctly tax the sale of their property and miss out on tax benefits due to lack of information or lack of proper advice.
At Quality Keys, we help our clients to make real estate decisions with a strategic vision, not only in the purchase or sale of the property, but also in its subsequent fiscal impact. If you have sold a house this year or are about to do so, contact us and we will guide you step by step.
Sources consulted:
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Agencia Tributaria – IRPF 2024
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OkDiario – Urgent warning from the Inland Revenue about personal income tax and housing
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Personal Income Tax Act – Tax Agency
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Idealista / Fiscal News
