Income tax on the sale of a property: what to check before filing your return
When you sell a property, the closing price is not the only thing that matters: it is also worth checking how the capital gain is calculated, what documents you need and which figures must match up before declaring it in IRPF.
What you should check before declaring the sale of a property
When you sell a property, the tax impact does not end with the signature. One of the points that tends to raise the most doubts is the capital gain for IRPF, that is, the difference between the transfer value and the acquisition value. In the practical information from the Comunidad de Madrid on the sale and purchase of properties, it is stated that the gain obtained from the sale of a property must be declared in the IRPF for the corresponding financial year and that it is calculated by subtracting the transfer value from the acquisition value Comunidad de Madrid.
That general framework is useful as a guide, but it is worth checking each figure carefully before submitting the return, because an error in amounts, expenses or dates can alter the outcome.
### 1. Check which details you need to gather
Before sitting down to calculate anything, have the basic documentation for the transaction to hand:
1. Purchase deed and, if applicable, sale deed.
2. Proof of expenses associated with the acquisition and the transfer.
3. Receipts or certificates proving payments linked to the property where applicable.
4. Correct ownership details if the property had several owners.
5. Information about annexes or related elements, if they were transferred together with the property.
**Practical tip:** create a folder with two clear sections: “purchase” and “sale”. That way you avoid mixing expenses from one stage with the other.
**Common mistake:** calculating the gain only from the purchase price and the sale price, without checking whether there are other documented amounts that should be included in the calculation.
### 2. Check the acquisition value and the transfer value
The key is to identify clearly what goes into each value.
- **Acquisition value:** usually starts from the price paid when buying.
- **Transfer value:** usually starts from the price obtained when selling.
But in practice you need to check which expenses and items are linked to each side of the transaction and whether they are sufficiently supported by documentation.
**Useful steps:**
1. Gather the purchase deed and the sale deed.
2. Separate the main amounts from the documented expenses.
3. Check that you are not duplicating items.
4. Make sure the details match the signed documents.
**Practical action:** if the property included a storage room or parking space linked to the transfer, check whether they were sold with the property or separately, because that affects how the paperwork should be organised.
### 3. Bear in mind situations that can change the approach
Not all sales are analysed in the same way. There are situations that require particular attention, for example:
- inherited property;
- property with several owners;
- sale after divorce or termination of joint ownership;
- main residence versus a property that was not;
- transfer with charges or accessory elements.
Here it is important to distinguish between general guidance and an individual review. The basic calculation rule serves as a starting point, but the final treatment may vary depending on the way the property was acquired, the ownership and the signed documents.
**Tip:** if the property was received by inheritance, do not assume the calculation is the same as for an ordinary purchase; first organise the acquisition and transfer documentation.
**Common mistake:** using a “memory-based” approach because a similar transaction worked out differently elsewhere. In tax matters, documentary details matter a great deal.
### 4. How to prepare before filing your return
To reach the filing period with less room for error, you can follow this sequence:
1. **Locate the deeds** for purchase and sale.
2. **Check the amounts** shown in both.
3. **Group together proofs** of related expenses and payments.
4. **Check ownership** if there was more than one owner.
5. **Order the signing and transfer dates** so that you do not mix financial years.
6. **Seek professional guidance** if there is inheritance, divorce, co-ownership or a sale with accessory elements.
**Practical action:** before finalising the return, prepare a one-page summary with: purchase date, sale date, purchase price, sale price and documented expenses. That summary helps you spot inconsistencies.
What UBICASA can do if you are thinking of selling
If you are considering selling a property in Madrid, you can start with an indicative estimate in our property valuation in Madrid. The online estimate provides a range and a PDF report, with an optional visit if you need it to refine the valuation.
If you would prefer to review your case with a professional, you can contact us on our contact page. You can also visit our office at Calle Montesa 29, Madrid, Monday to Friday from 10:00 to 15:00 and from 16:00 to 19:00.
Mistakes worth avoiding
- Confusing the signing price with the tax value without checking the documentation.
- Mixing purchase and sale expenses.
- Forgetting to check ownership when there is more than one owner.
- Assuming that a tax exemption or benefit applies automatically to any property.
- Filing the return without verifying that deeds and supporting documents match.
If you want to use this guide as preparation, the right aim is not to “do the maths in a hurry”, but to arrive at the return with the information organised and any doubtful points identified in time.
If you would like to go further, read our related guide: Municipal capital gains tax in Madrid: what it is and how it affects the sale of your property.