How Much Money Will I Actually Keep After Selling My Property in Tenerife?
One of the most common questions property owners ask is: how much money will I actually receive after the sale? In short: the sale price minus agency fees, plusvalía, any mortgage and – depending on your situation – capital gains tax. Here is how each item works, with a worked example.
The answer depends on several factors, including the original purchase price, the selling price, documented improvements, tax residency and the municipality in which the property is located.
Typical Taxes and Costs When Selling Property in Tenerife
Capital Gains Tax
When a property is sold in Spain, any taxable capital gain may be subject to taxation.
The gain is generally calculated as the difference between the acquisition value and the disposal value, taking into account certain deductible costs and expenses.
Potential deductible items may include:
- Notary and Land Registry fees paid when purchasing
- Transfer Tax (ITP) or VAT paid on acquisition
- Documented property improvements
- Real estate agency fees
- Municipal Capital Gains Tax (Plusvalía Municipal)
Tax rates: Non-residents are generally taxed at a flat 19% on the gain if they live in the EU/EEA, and 24% otherwise. Spanish tax residents pay according to the savings-income scale, which starts at 19%. Residents may be exempt in specific cases, for example when selling their habitual home and reinvesting in a new one, or when aged 65 or over selling their habitual home.
3% Withholding for Non-Residents
When the seller is not a Spanish tax resident, the buyer is legally required to withhold 3% of the purchase price and pay it directly to the Spanish Tax Authority.
This is not an additional tax. It is an advance payment towards the seller’s final tax liability. The final tax return for non-residents (Modelo 210) is generally due within three months of the sale; if the 3% withheld exceeds the tax actually due, the difference can be reclaimed.
Municipal Capital Gains Tax
Plusvalía Municipal is a local tax based on the increase in the cadastral value of the land during the ownership period.
The amount varies depending on the municipality, cadastral value and ownership duration. In principle the seller pays it, and it can be zero if the property did not actually gain value.
Real Estate Agency Fees
Agency commissions commonly range between 3% and 5% of the sale price, plus applicable IGIC where relevant.
Mortgage Cancellation Costs
If a mortgage remains outstanding, it must usually be settled and cancelled as part of the sale process. Your bank can issue the outstanding balance, including any early repayment fee, before the notary appointment.
Community Fees and Property Tax
All community charges and annual property tax (IBI) should be up to date before completion. The notary will usually ask for a community certificate confirming there are no arrears.
Documents You Will Need
- Title deed (escritura) and your purchase documents
- Energy performance certificate
- Recent IBI receipt and community certificate
- Invoices for improvements you want to deduct
- Mortgage balance statement, if applicable
Worked Example: What Is Left After the Sale?
The following is a simplified illustration for a non-resident EU seller. All cost figures except the prices are assumptions for demonstration only; your real numbers will differ.
| Item | Amount |
|---|---|
| Purchase price | €150,000 |
| Purchase costs (assumed: taxes, notary, registry) | €12,000 |
| Documented improvements (assumed) | €10,000 |
| Sale price | €280,000 |
| Agency fee 4% (excl. IGIC) | €11,200 |
| Plusvalía Municipal (assumed) | €3,000 |
| Taxable gain (280,000 − 172,000 − 14,200) | €93,800 |
| Capital gains tax at 19% | €17,822 |
| Already withheld by the buyer (3%) | €8,400 |
| Remaining tax to pay with the tax return | €9,422 |
In this example, you would keep roughly €280,000 − €14,200 (agency fee and plusvalía) − €17,822 (tax) ≈ €248,000 before any mortgage repayment and before IGIC on the agency fee. Without documented improvements or purchase costs, the taxable gain and therefore the tax would be noticeably higher – which is why keeping your invoices matters.
For this reason, a personalised calculation is recommended before setting an asking price or accepting an offer.
Tips to Protect Your Net Proceeds
- Collect all purchase documents and renovation invoices before you list.
- Price realistically: an overpriced property that sits on the market usually ends up selling for less.
- Clarify your tax residency status early, as it determines the rate and the 3% withholding.
- Ask your gestor or tax adviser to confirm the numbers before signing.
Prices and demand also differ by region. See our local guides for selling in South Tenerife, North Tenerife and the West Coast.
Frequently Asked Questions
Do I have to pay tax when selling property in Tenerife?
In most cases, yes. Tax liability depends on the gain realised and the seller’s individual tax circumstances.
Is the 3% withholding an additional tax?
No. It is credited against the seller’s final tax calculation.
Can I reduce my taxable gain?
Certain documented costs and improvements may be deductible.
Do I also need to declare the sale in my home country?
Possibly. This depends on the tax laws of your country of residence and any applicable double taxation agreements.
How can I estimate my net proceeds?
The most reliable approach is to obtain a personalised calculation based on your purchase documents and tax situation.
Who pays the plusvalía municipal?
By default the seller pays it, although buyer and seller can agree otherwise in the contract.
How long does it take to receive the money?
The purchase price is normally paid at the notary on completion day. Any mortgage is repaid from that amount, and you receive the balance. Capital gains tax is settled afterwards with your tax return.
For a personalised view of your figures, visit our property-selling page for the next steps.
Do you know what your property is worth? Request your free, no-obligation property valuation here – carried out personally by Steve Martindale, online or on site.
Legal Disclaimer: The information provided in this article is for general informational purposes only and does not constitute tax or legal advice. Every property transaction should be assessed individually. The worked example is a simplified illustration with assumed figures.