Spain’s Proposed Capital Gains Tax Reform: Higher Taxes for Properties Bought During the Housing Bubble

A new tax reform proposal from Spain’s PSOE party could increase capital gains tax for homeowners who bought during the country’s real estate bubble of the early 2000s. If implemented, the reform would eliminate existing inflation adjustment coefficients—rules that help reduce taxable gains by accounting for the time value of money. This change may significantly increase the tax bill for sellers who bought property 15–20 years ago.

In this blog post, we’ll explain the background, the proposed changes, and how they could affect both residents and non-resident property owners in Spain.

What Are Capital Gains Coefficients in Spain?

Until now, when a homeowner sold a property in Spain, their capital gain was calculated as the difference between the sale price and the original purchase price. To make the system fairer, Spain allowed “coefficients for monetization” (coeficientes de abatimiento)—which reduced the gain based on how long the property was held, particularly for purchases made before 1994 or during high inflation periods.

These adjustments were especially helpful for those who bought during the 2000s real estate boom and are only now looking to sell.

What Is Changing in 2025?

The PSOE’s proposal would:

• Eliminate these inflation-linked coefficients
• Apply capital gains tax on the full nominal gain, regardless of how long the property was held
• Affect both residents and non-residents selling property in Spain

Key motivation:

• Increase tax revenue
• Align Spain’s tax framework with EU recommendations for simplifying property taxation

Who Will Be Most Affected?

• Owners who purchased between 1998 and 2008 (Spain’s real estate bubble)
• Sellers who have held property for 15–25 years
• Individuals expecting to offset capital gains with time-based deductions
• Both Spanish tax residents and non-residents, including foreign investors

Capital Gains Tax Rates in Spain (2025)

Non-resident EU/EEA sellers: same rates apply. Non-EU sellers: taxed at 24% flat rate.

Example Scenario

Ana bought a property in Valencia in 2002 for €120,000. She plans to sell it in 2025 for €320,000.

• Old system (with adjustment): Taxable gain = €150,000 → Effective tax ~€30,000
• New proposal: Taxable gain = €200,000 → Tax jumps to €46,000

The reform results in over €15,000 more in tax due to the removal of inflation adjustment.

What Can Sellers Do?

• Consider selling before the law is approved
• Consult a tax expert to explore alternative ownership structures
• Keep meticulous records of all purchase and improvement costs
• Understand treaty benefits if you’re a non-resident seller

How Taxadora Helps

At Taxadora, experts in spanish tax forms, we support clients through:

• Accurate capital gains tax calculations
• Maximizing allowable deductions
• Filing Modelo 210 and refund claims for the 3% withholding
• Strategic advice on timing and ownership

Final Thoughts

If passed, the PSOE’s capital gains tax reform would end decades of inflation-based relief for long-term property owners. This could significantly increase the cost of selling property in Spain, particularly for those who bought during the housing bubble.

If you’re considering a sale—or just want to understand how this change could impact your tax position—visit our blog or reach out to the experts at Taxadora today.