Chiara Bellini lives in Turin and in 2018 bought a second-hand flat in the Russafa district of Valencia for 210,000 €. She keeps a folder with everything: the payment slip for the transfer tax, the notary's invoice, the land registry's, the invoice from the gestoría (the administrative agency that handled the deed), the mortgage statements, the IBI bills (the annual municipal property tax), the service-charge receipts from the comunidad de propietarios (the owners' association of the building) and the invoice for the kitchen she renovated completely in 2021. In 2026 she is selling for 290,000 € and wants to know which of those papers lower her tax. Not all of them, and the difference between getting it right and getting it wrong is several thousand euros.
What the law says exactly
Article 35.1 of the IRPF Law (Spanish personal income tax), to which article 24.4 of the IRNR Law (the law on non-resident income tax) refers for non-residents, builds the acquisition value from two pieces:
- The actual amount for which the property was bought.
- "The cost of the investments and improvements made to the assets acquired and the expenses and taxes inherent in the acquisition, excluding interest, that have been paid by the acquirer".
And section 2 of the same article allows expenses and taxes of the same nature paid by the seller to be subtracted from the sale price. Three ideas follow from this: the cost must be inherent in buying or selling, not in owning the flat; it must have been paid by the taxpayer; and interest is left out by express mention.
Chiara's folder, paper by paper
| Document | Amount | Does it add or subtract? | Reason |
|---|---|---|---|
| Purchase price in the deed | 210,000 € | Adds | It is the actual amount of the acquisition |
| Transfer tax | 18,900 € | Adds | Tax inherent in the purchase |
| Notary for the purchase | 1,100 € | Adds | Inherent cost |
| Land registry | 650 € | Adds | Inherent cost |
| Gestoría for the deed | 400 € | Adds | Cost inherent in processing the purchase |
| Mortgage interest | 21,000 € | No | Expressly excluded by article 35.1.b |
| Loan arrangement fee and valuation | 2,300 € | No | They relate to the financing, not the purchase |
| IBI and service charges from 2018 to 2026 | 9,800 € | No | They are costs of owning the flat, not of acquiring it |
| Complete new kitchen, 2021 | 14,200 € | Adds | An improvement invoiced in her name |
| Estate agent's commission on the sale | 8,700 € | Subtracted from the sale price | A cost of the transfer paid by her |
| Plusvalía municipal on the sale | 1,300 € | Subtracted from the sale price | A tax charged on the transfer |
The amount of transfer tax is the one on Chiara's payment slip. The applicable rate depends on the autonomous region and on the year of purchase, so in each case you have to take the amount paid, not a calculated one. The plusvalía municipal is the municipal tax on the increase in land value.
The figures, with the costs and without them
With the folder in order:
- Acquisition value: 210,000 + 18,900 + 1,100 + 650 + 400 + 14,200 = 245,250 €.
- Transfer value: 290,000 − 8,700 − 1,300 = 280,000 €.
- Gain: 280,000 − 245,250 = 34,750 €.
- Tax at 19 %: 6,602.50 €.
- The buyer's withholding, 3 % of 290,000: 8,700 €.
- Result: Chiara gets back 2,097.50 €.
Had she declared price against price only, 290,000 − 210,000, her gain would have been 80,000 € and the tax 15,200 €: she would have had to pay 6,500 € on top of what was withheld. Even without going to that extreme, forgetting the kitchen and the purchase costs would have turned a refund into a payment. The full mechanics of the calculation are in the guide working out the gain when you sell.
Costs that look as if they add and do not
Some items raise doubts every time:
- Mortgage interest. It never adds. The law excludes it by name.
- Costs of setting up and cancelling the mortgage. These are financing costs. We would not include them in the acquisition value without solid backing, because it is one of the first things a tax check corrects.
- Furniture and appliances. Whether bought with the flat or afterwards, they are not part of the property. If they are sold with it, the right thing is to show their price separately in the deed.
- Repairs and maintenance. Painting, fixing a leak or replacing a boiler with an equivalent one is not an improvement. Where the line falls is covered in I renovated the flat: does that add to the purchase value?.
- Travel costs to sign. Flights and hotels are not inherent in the acquisition.
- Lawyer's fees on the purchase. When they are directly linked to the operation, such as checking charges on the property or drafting the contract, there are arguments for treating them as inherent, although the point is not settled; the invoice should describe the service.
The invoice is not enough: payment too
For a cost to add, having the invoice is not sufficient. The authorities may ask for proof that it was paid, and of who paid it. With Chiara's kitchen, what stands up to a check is the invoice in her name, with the supplier's tax number and a description of the work, and the debit in her bank account. A cash payment with no trail leaves the item up in the air.
The same goes for who paid. If Chiara's brother paid for the kitchen from his account, the law speaks of costs "paid by the acquirer", and it is not obvious that they would be accepted. If that is the situation, it deserves analysis before including it.
If the authorities reject a cost in a tax check, they do not just remove it: they issue an assessment with late-payment interest and may open penalty proceedings if they consider the return had no basis. With debatable costs, the possible saving must be weighed against that risk. We cannot promise that a doubtful cost will be accepted.
What happens if the flat was let
Had Chiara let it, there would be an adjustment in the opposite direction: the minimum depreciation for the years it was let is subtracted from the acquisition value, whether or not it was deducted. And improvements are depreciated too, from the moment they are made. A 14,200 € kitchen adds to the purchase, but if there was letting, part of it is subtracted again. This is explained in I let the flat: does that count against me when I sell?.
If you send us the folder through the property sale form, we will review which items hold up and which are better left out.
If the flat was inherited or bought in pesetas
The rules change in two common situations. When the flat was inherited, the acquisition value is the one declared for Inheritance Tax, and the costs of the inheritance play the part of the purchase costs: we deal with it in I am selling a flat I inherited. When the purchase was made in pesetas, or an invoice is in another currency, each amount has to be converted at the appropriate rate, as explained in I bought in pesetas or in another currency.
The selling costs, in the deed
On the sale side, what is subtracted from the price is what the seller pays in order to sell: the estate agent, the plusvalía municipal, and the notary if the contract puts it at the seller's expense. Other costs linked to the sale, such as the energy performance certificate, can be defended on the same reasoning, always with an invoice. The custom of splitting the notary and land registry fees between the parties varies, so you should look at the deed to know who paid what. If the buyer took on a cost that normally falls to the seller, the seller does not subtract that cost.
A properly built purchase value is the piece that most affects the final result. Reviewing it paper by paper is part of the Salama Tax service for non-residents selling a property.