Taxes on Selling Property in Madrid in 2026: Complete Guide

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What Taxes Are Paid When Selling a Property in Madrid? <\/h2>

If you are considering selling a property in Madrid in 2026, it is important to know the associated taxes<\/b> to avoid surprises and plan the transaction efficiently.<\/p>

The main taxes on selling a property in Madrid<\/b> are:<\/p>

• Personal Income Tax (IRPF)<\/b>: Paid in the income tax return for the profit obtained from the sale.<\/li>
• Municipal Capital Gains Tax<\/b>: Paid to the local council and levies the increase in land value.<\/li>
• 3% Withholding for Non-Residents<\/b>: Applicable if the seller does not reside in Spain.<\/li> <\/ul>

  Below, we explain each of these taxes in detail.<\/p>

  1. IRPF on the Sale of a Property in Madrid<\/h2>

  The Personal Income Tax (IRPF)<\/b> levies the capital gain obtained from the sale of the property.<\/p>

  How is the IRPF on Property Sales Calculated?<\/h5>

  It is calculated by subtracting the purchase price<\/b> (plus associated expenses) from the sale price<\/b> (minus transmission expenses). The gain is integrated into the savings base and taxed in 2026 at the following rates:<\/p>

  • Up to €6,000: 19%<\/li>
  • From €6,000 to €50,000: 21%<\/li>
  • From €50,000 to €200,000: 23%<\/li>
  • From €200,000 to €300,000: 27%<\/li>
  • More than €300,000: 28%<\/li> <\/ul>

    If the sale generates losses, no IRPF is paid, and they can be offset against other gains in the income tax return.<\/p>

    Exemptions from Paying IRPF<\/h5>

    There are three situations where IRPF is not paid on the sale of the property:<\/p>

    • If the money is reinvested in purchasing another main residence within two years<\/b>.<\/li>
    • If the seller is over 65 years old<\/b> and sells their main residence.<\/li>
    • If the amount is used for an annuity for those over 65 years old<\/b>.<\/li> <\/ul>

      2. Municipal Capital Gains Tax in Madrid<\/h2>

      The municipal capital gains tax<\/b> is a local tax that levies the increase in land value from purchase to sale.<\/p>

      How is the Municipal Capital Gains Tax Calculated?<\/h5>

      There are two methods, and the seller can choose the one that is more favourable:<\/p>

      • Objective Method<\/b>: Calculated by applying a coefficient (according to years of ownership) to the cadastral value of the land.<\/li>
      • Real Method<\/b>: Based on the difference between the purchase and sale price.<\/li> <\/ul>

        For more information, you can check our article on municipal capital gains tax in Madrid<\/a>.<\/p>

        3. 3% Withholding for Non-Residents<\/h2>

        If the seller does not reside in Spain, the buyer must withhold 3% of the sale price<\/b> and pay it to the tax authorities as an advance on the tax the seller must pay.<\/p>

        How to Reduce Taxes When Selling a Property<\/h5>

        To minimise the tax burden, consider these strategies:<\/p>

        • Apply IRPF exemptions if you meet the requirements.<\/li>
        • Use the most favourable calculation method for the municipal capital gains tax.<\/li>
        • Dedicate the sale proceeds to an annuity if you are over 65 years old.<\/li> <\/ul>

          Conclusion<\/h2>

          Selling a property in Madrid involves paying several taxes, but with proper planning, it is possible to optimise the tax burden. Before selling, consult with a tax advisor or review the current regulations at the Madrid City Council<\/a> and the Tax Agency<\/a>.<\/p>