Written by Nicki Price, CEO
If you are selling your home on the Costa del Sol in 2026, the two biggest legal ways to pay little or no capital gains tax (CGT) are main-home reinvestment relief and the over-65 exemption. If the property has been your habitual residence and you are a Spanish tax resident, you can defer or wipe out the gain by reinvesting the proceeds in another main home within two years (exención por reinversión), and if you are 65 or older you can sell your main home completely free of CGT under the Agencia Tributaria's rules. Everyone else pays the savings-income scale of 19%–28% on the profit, so the question of whether you qualify for an exemption is worth real money.
This guide explains exactly how these reliefs work for sellers on the Costa del Sol (and the same rules apply across our Costa Blanca, Costa Cálida and Costa Almería areas, because capital gains tax is a national tax, not a regional one). We cover who qualifies, the deadlines, the forms, and how the 3% non-resident retention fits in. For the wider picture of fees, timing and steps, pair this with our guide to selling property in Spain in 2026.
Capital gains tax is the tax on the profit between what you paid for the property (plus allowable purchase costs) and what you sell it for (minus allowable selling costs). It is a national tax under the Agencia Tributaria, so the Junta de Andalucía does not set a separate rate — the Costa del Sol seller pays the same CGT as a Costa Blanca or Costa Almería seller.
The gain is calculated as the sale price less the acquisition value. Your acquisition value can include the original purchase price, the ITP or IVA you paid when you bought, notary and registry fees, your lawyer's fee and any documented capital improvements (not routine repairs). Selling costs — estate agency commission, your lawyer, the energy certificate — reduce the gain too. Keep every invoice: without documents, the Agencia Tributaria will not let you deduct the cost.
For Spanish tax residents the gain is taxed within the savings income (base del ahorro) scale, which runs on bands. For non-residents the gain is taxed at a flat rate under the Impuesto sobre la Renta de No Residentes. These are the 2026 figures:
| Who you are | Rate on the gain |
|---|---|
| Resident — first €6,000 of gain | 19% |
| Resident — €6,000 to €50,000 | 21% |
| Resident — €50,000 to €200,000 | 23% |
| Resident — €200,000 to €300,000 | 27% |
| Resident — above €300,000 | 28% |
| Non-resident (EU/EEA and third countries) | 19% flat |
So a resident with a €120,000 gain pays a blended figure across the bands, not a flat 23%. A non-resident selling the same property pays a flat 19% but cannot normally use the reinvestment relief or over-65 exemption, which are reserved for residents selling their habitual residence. Working out whether you are resident matters hugely here — see our explainer on Spain's 183-day tax residency rule.
Reinvestment relief (exención por reinversión en vivienda habitual) lets a Spanish tax resident avoid CGT on the sale of their main home if they reinvest the sale proceeds in buying or building another main home. Reinvest the full amount and the whole gain is exempt; reinvest only part and the exemption is proportional.
The conditions set by the Agencia Tributaria are strict and worth knowing before you sign anything at the notary:
You claim the relief on your annual resident income tax return, Modelo 100, in the year of the sale, declaring your intention to reinvest. If you later fail to reinvest within two years, you must file a supplementary return and pay the tax with interest, so the intention has to be genuine.
Say you are resident in Benalmádena, bought your flat for €220,000 (plus €20,000 costs) and sell it for €340,000 with €15,000 of selling costs. The gain is roughly €340,000 − €15,000 − €240,000 = €85,000. Reinvest the full net proceeds into a new main home in, say, Estepona within two years and the €85,000 gain is fully exempt — you pay nothing. Reinvest only half and roughly half the gain becomes taxable. If you are weighing where to move, our Estepona area guide and our Benalmádena guide are good starting points.
If you are 65 or older and a Spanish tax resident, the sale of your habitual residence is completely exempt from capital gains tax — with no requirement to reinvest anything. This is the single most powerful relief for older Costa del Sol sellers, and unlike reinvestment relief you are free to spend the money however you like: downsize, rent instead, or gift it.
The key conditions from the Agencia Tributaria are:
There is a second, lesser-known over-65 relief: the gain on the sale of any asset (not just your main home) can be exempt if you reinvest up to €240,000 of the proceeds into a lifetime annuity (renta vitalicia) within six months. This can help over-65s selling a Costa del Sol holiday home or investment flat, not just their main residence.
If you qualify for both, the over-65 exemption is usually simpler because it carries no reinvestment obligation and no two-year clock. Reinvestment relief is the route for under-65s who are selling to buy another main home.
| Feature | Reinvestment relief | Over-65 exemption |
|---|---|---|
| Minimum age | None | 65 at date of sale |
| Property must be main home | Yes | Yes |
| Must reinvest proceeds | Yes, in a new main home within 2 years | No |
| Amount exempt | Proportional to amount reinvested | 100% of the gain on your share |
| Available to non-residents | No | No |
| Declared on | Modelo 100 | Modelo 100 |
When the seller is a non-resident, the buyer is legally required to withhold 3% of the sale price and pay it to the Agencia Tributaria using Modelo 211, as a payment on account of the seller's CGT. The non-resident seller then files Modelo 210 within four months of the sale to settle the real tax: if the actual CGT is less than the 3% withheld, you reclaim the difference; if more, you pay the balance.
Spanish-resident sellers are not subject to the 3% retention — but you must prove residency to the buyer with a tax-residency certificate, or the buyer will withhold anyway to protect themselves. This is a common sticking point at completion, so sort your certificate out early. If you are a non-resident, understand your ongoing obligations too via our guide to holiday-home taxes and Modelo 210.
Separate from CGT, sellers also face the plusvalía municipal (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana), a local tax on the increase in the land value, charged by the town hall. Crucially, the over-65 main-home CGT exemption does not exempt you from plusvalía — these are two different taxes with two different authorities. Since the 2021 reform you can choose the calculation method that gives the lower bill, and if you sell at a genuine loss on the land value you can avoid plusvalía altogether with the right paperwork. Each Costa del Sol municipality (Marbella, Mijas, Fuengirola, Estepona) sets its own rate within the national limits, so check locally.
Across the coasts we cover, Mediter Real Estate currently has 15,664 properties for sale on the Costa del Sol, Costa Blanca South, Costa Cálida, Costa Blanca North, Costa de Almería and Mallorca. That spread matters for reinvestment relief: because the replacement main home can be in another region or even another EU country, plenty of our sellers release equity on a larger Costa del Sol villa and reinvest into a right-sized main home elsewhere on the coast — rolling the gain over tax-free in the process. If you are moving between coasts, our comparison of the four Spanish costas is a useful read.
Residents declare the sale and claim the exemption on the annual Modelo 100 income tax return, filed in the spring following the year of sale (the 2026 sale is declared in the 2027 campaign). Keep your escritura of purchase and sale, all cost invoices and, for reinvestment, proof of the new purchase. Because the sums are large and the paperwork unforgiving, use a Spanish lawyer or gestor — their fee is itself a deductible cost. For the broader completion process, see our guide to the notary and completion day.
If you are a Spanish tax resident and the home was your habitual residence, you can avoid CGT by reinvesting the proceeds in a new main home within two years, or completely if you are 65 or over. Otherwise the gain is taxed on the 19%–28% savings scale.
Not directly — the full exemption is for your habitual residence. However, over-65s can shelter the gain on other assets, including a holiday home, by reinvesting up to €240,000 into a lifetime annuity within six months.
No. Both reinvestment relief and the over-65 exemption require Spanish tax residency and that the property is your habitual residence. Non-residents pay a flat 19% and are subject to the 3% retention via Modelo 211, settling the final tax on Modelo 210.
Yes. The replacement main home can be anywhere in the EU/EEA, not only in Spain, provided it genuinely becomes your habitual residence within the rules.
No. Plusvalía municipal is a separate local land-value tax charged by your Costa del Sol town hall and is not covered by the national CGT exemptions. You can, however, choose the lower of the two official calculation methods and avoid it entirely if you sell at a land-value loss.
Broadly, a home you have lived in continuously for at least three years as your main residence. Shorter periods can qualify if you moved for justified reasons such as a job change, marriage or health.
Whether you are an over-65 downsizer on the Costa del Sol, a resident rolling your gain into a new main home, or a buyer looking for that replacement property, Mediter Real Estate can help you time the sale and the reinvestment to stay tax-efficient. Contact our team about property across the Costa del Sol, Costa Blanca, Costa Cálida and Costa Almería — email info@mediter.com or call +34 744 719 499. (This article is general guidance, not personal tax advice; always confirm your position with a Spanish lawyer or gestor.)
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