Buying & selling · · 10 min read
Selling Your Flat in Madrid in December 2026 or January 2027: Plusvalía, IBI, Income Tax and What Changes with the New Year
Sign the sale of your flat in December 2026 or wait until January 2027? Using official sources, we look at what changes with the new year: the plusvalía municipal (local land value tax) and the decree awaiting a vote on 12 November, who pays the 2027 IBI property tax, the Catastro reference value, which tax return the sale goes in, the 4% transfer tax for buyers under 40 and special levies. With a summary table and a worked example.
If you are selling your flat in Madrid and the signing is likely to fall at the end of the year, sooner or later you will ask yourself: December or January? There may be only a few days between the two dates, but the year changes, and with it the tax year in which you declare the sale, who owes the 2027 IBI (the annual property tax), the Catastro reference value and, possibly, the tax paid by a young buyer.
Here is what is known as of 21 October 2026, based on official sources, and what still depends on the vote of 12 November, Madrid City Council's tax bylaws and the Madrid regional budget. At the end you will find a summary table and a worked example.
The date that counts is the deed, not the arras
Almost everything depends on the day you sign the escritura (the public deed of sale) before a notary. The arras, the reservation contract in which the buyer pays a deposit, are not the sale. For income tax (IRPF), the tax year is the calendar year, and the Spanish Tax Agency takes the date of the deed as the date of sale unless an earlier handover is proven, according to the Dirección General de Tributos (the Ministry of Finance's tax rulings office). The buyer's transfer tax (ITP) also falls due on the day of the contract.
Capital gains and losses shall be allocated to the tax period in which the change in assets takes place.
Ley 35/2006 (Spanish Income Tax Act), article 14.1.c), our translation
Plusvalía municipal: the table in force on signing day applies
The plusvalía municipal is the local tax on the increase in the value of the land, and in a sale it is paid by the seller. There are two ways to calculate it: the objective method multiplies the cadastral value of the land by a coefficient based on how many years you have owned the flat; the actual-gain method starts from the gain shown in the purchase and sale deeds. You pay whichever is lower, and if there is no gain, there is no tax.
…the objective system for determining the tax base becomes an optional system.
Royal Decree-law 26/2021, preamble, our translation
The new year does not change the plusvalía by itself, but two details matter. Years are counted in whole years: if you bought on 20 January 2015, selling on 18 December 2026 or on 15 January 2027 counts as 11 years; from 20 January it counts as 12, and the coefficient changes. And Madrid has no table of its own: according to the wording of its bylaw processed for 2024, it applies the coefficients set by law that are in force on the day of the sale.
That table may change. The BOE (Spain's Official State Gazette) confirms that article 10 of Royal Decree-law 29/2026, in force since 8 October, sets new maximum coefficients for the objective method. Some legal publications say they apply from 1 December 2026, but we have not been able to verify that date or the figures in the official text. The decree depends on validation by the Diputación Permanente (the standing committee of the Congress of Deputies), scheduled for 12 November; if it is not validated, it is repealed.
IBI: who pays for 2026 and for 2027
The IBI (Impuesto sobre Bienes Inmuebles, the annual property tax) falls due on 1 January and covers the whole year: as far as the City Council is concerned, it is owed by whoever owns the property on that day. If you sign in December 2026, the 2027 IBI will be the buyer's. If you sign in January 2027, the 2027 IBI is yours, even if you own the property for only a few days. In 2016 the Supreme Court accepted that the seller may pass the proportional share on to the buyer unless agreed otherwise, so put the split in writing.
On 15 October 2026, the City Council's Governing Board approved the initial draft of the tax bylaws, which lowers the IBI rate from 0.414% to 0.4%, with an average bill of 540 euros. We explain it in «Madrid IBI Property Tax 2027 and the Catastro Reference Value: What Changes for Homeowners on 1 January 2027».
Catastro reference value 2027: it matters to the buyer
The ITP (Impuesto sobre Transmisiones Patrimoniales, the transfer tax paid by buyers of resale homes) is calculated on whichever is higher, the price or the Catastro reference value «on the date the tax falls due»: a December deed uses the 2026 value; a January deed, the 2027 value. For you it is not the basis for plusvalía or income tax, but it affects the negotiation: a well-informed buyer will check it before making an offer.
Income tax: December is declared in 2027; January, in 2028
The gain is what you receive, minus the costs of the sale, minus what the flat cost you, including purchase costs and improvements. It is declared in the tax return for the year of the deed: December 2026 goes in the 2026 return (filed in 2027); January 2027, in the 2027 return (filed in 2028). For Spanish tax residents it is taxed on this savings income scale:
| Gain (savings tax base) | Total rate (state + regional) |
|---|---|
| Up to €6,000 | 19% |
| €6,000 to €50,000 | 21% |
| €50,000 to €200,000 | 23% |
| €200,000 to €300,000 | 27% |
| Over €300,000 | 30% |
Law 7/2024, effective from 1 January 2025 (Fieldfisher). Applied in bands: 19% on the first €6,000, 21% on the next €44,000, and so on.
With the same scale, the tax would be the same in both years; what changes is when you pay and which other gains or losses of that year it is combined with. But the date can be decisive in three cases:
- Over-65s: they pay no income tax on selling their main home, and age is checked on the day of the sale. If you turn 65 in January, signing after your birthday can make the gain exempt.
- Main home (vivienda habitual): as a rule, you must have lived there for at least three consecutive years; it still counts if you moved out up to two years before selling. If you reach those deadlines between December and January, the date matters.
- Reinvestment: if you reinvest the proceeds of your main home in another main home within two years, the gain can be fully or partly exempt. If there was a mortgage, the capital repaid on the sale is taken into account.
Young buyers: ITP at 4% from January, if approved
On 5 October 2026, the Madrid regional government announced a 4% ITP rate, instead of 6%, for under-40s buying a resale home as their main residence for up to 450,000 euros. It will be included in the 2027 budget law and would apply from 1 January if the legislative process is completed. As of 21 October it is not law: it may change and, if it is not approved in time, the 6% rate would remain.
For a buyer paying 410,000 euros, that would be 8,200 euros less, so some young buyers will prefer to sign the deed in January. If that suits you, set a deadline for the deed with some leeway in the arras contract, and agree what happens if the reduction does not arrive. We cover it in «Madrid Cuts Property Transfer Tax (ITP) to 4% for Under-40s from 1 January 2027: Requirements, Savings and What Happens If You Buy in December».
Community fees and special levies at the turn of the year
In the deed you declare that you are up to date with the comunidad de propietarios (homeowners' association) and provide a certificate of debts; without it the notary cannot authorise the signing, unless the buyer waives it. The association has up to seven calendar days to issue it: with the holidays, ask for it in good time. The buyer is liable, with the property, for debts from the year of purchase and the three previous years.
Special levies (derramas) for improvements are paid by whoever owns the property when they become payable. If the owners' meeting approved in November a levy collected in March, the buyer will pay it, whether you sign in December or January, unless agreed otherwise. Put the split in writing, including the ordinary fees.
December versus January: summary table
| Item | If you sign in December 2026 | If you sign in January 2027 |
|---|---|---|
| Plusvalía municipal | Table in force that day; RDL 29/2026 depends on 12 November | Same; the new year does not change it by itself |
| Years of ownership | Whole years up to the deed | One more year if you pass the anniversary of your purchase |
| Income tax on the sale | 2026 return, filed in 2027 | 2027 return, filed in 2028 |
| Over-65 exemption | Age reached on the day of the deed | Same; if you turn 65 in January, it may change |
| 2027 IBI | Owed by the buyer | Owed by you; can be split by agreement |
| Reference value (buyer's ITP) | 2026 value | 2027 value |
| ITP for buyers under 40 | 6% | 4% if approved in time |
| Special levies | Whoever owns the property when payable, unless agreed otherwise | Same |
Sources: Income Tax Act and ruling V0035-23 of the Dirección General de Tributos; RDL 26/2021 and RDL 29/2026 (BOE); Madrid City Council (15-10-2026); Madrid regional government (5-10-2026); ITP Act and Ley de Propiedad Horizontal (Spanish Condominium Act, BOE).
Worked example: the same sale on 18 December or 15 January
Carmen turns 65 on 10 January 2027. She is selling her main home in the city of Madrid for 410,000 euros; she bought it on 20 January 2015 for 250,000 euros plus 17,500 in costs. Her sale costs, including the plusvalía, come to 14,000 euros: her gain is 128,500. The cadastral value is 180,000 euros and the buyer, aged 34, is buying it as their main home.
| Item | Deed on 18-12-2026 | Deed on 15-01-2027 |
|---|---|---|
| Carmen's age on signing day | 64 | 65 |
| Income tax on the gain | €28,435 in the 2026 return, unless she reinvests | €0: exempt, if she meets the requirements |
| Plusvalía municipal | 11 whole years, table in force that day | 11 whole years, table in force that day |
| 2026 IBI (€745.20) | Paid by Carmen; with a daily split, the buyer refunds her €28.58 | Paid by Carmen; not part of the sale |
| 2027 IBI (€720 at 0.4%) | Owed by the buyer | Owed by Carmen; with a daily split, the buyer refunds her €692.38 |
| Buyer's ITP | €24,600 (6%) | €16,400 (4%), only if approved |
| €2,400 levy payable on 1-3-2027 | Paid by the buyer, unless agreed otherwise | Paid by the buyer, unless agreed otherwise |
Illustrative example by Llavely. Income tax: €6,000 at 19% + €44,000 at 21% + €78,500 at 23%, with no other savings income. IBI: cadastral value times the rate, split over 365 days (14 days for each party). ITP assuming a price equal to or higher than the reference value.
Here, waiting until January saves Carmen more than 28,000 euros. But this case is designed to illustrate the point: at 50, the tax would be the same on both dates and only the year of the return and the IBI would change; and if she reinvested everything in another main home, her income tax could be zero on either date.
What to do before setting the date
- Calculate the plusvalía using both methods and repeat it after 12 November.
- Check the purchase date on your deed, your age and your main-home or reinvestment deadlines.
- Agree in writing how the 2026 and 2027 IBI, community fees and levies are split.
- If the buyer is under 40 and prefers January, set a deadline and what happens if the reduction is not approved.
- Ask early for the community certificate and the notary appointment, and set aside from signing day what you will owe the tax authorities.
How we do it at Llavely
At Llavely, with more than 35 years in the property sector and specialist lawyers, we sell your home in the Madrid region with everything included: valuation, photos, video, floor plan and virtual tour. We talk to every buyer and check their ID before the viewing; we carry out the viewings ourselves and you follow them from your private seller portal. If the buyer needs a mortgage, we put them in touch, free of charge, with a mortgage broker. And we check your identity and ownership using the nota simple (land registry extract showing who owns the property and any charges on it) or your purchase deed.
Our specialist lawyers are with you from start to finish: they review the nota simple, any charges and debts, calculate the taxes that apply, draft the arras contract and any special clauses where needed, such as the IBI split or a deed date with some leeway, review the deed and go with you in person to the notary. Payments are made by ordinary bank transfer or OMF (orden de movimiento de fondos, the interbank payment used at the notary's office), never in cash. You only pay if you sell, on the day of signing at the notary: 2.5% + VAT of the price, in total, with everything included. Buying with Llavely is free.
We don't know how the vote on 12 November will go or whether the ITP reduction will arrive on 1 January, and the best date depends on your situation. What we can do is help you set a realistic price and organise the sale with clear dates. Ask for your free valuation: we give you a price range straight away, then we call you (we reply in English by email, message or phone), see the property and fine-tune the price.
Frequently asked questions
Is it better to sell my flat in December or in January?
It depends on your situation. For most sellers the income tax would be the same under the current scale; what changes is the year the sale is declared and who owes the 2027 IBI. The date matters more if you turn 65 in between, if the anniversary of your purchase falls in those weeks or if the buyer is under 40 and wants to wait for the 4% ITP.
If I sell my flat in December 2026, when do I pay income tax?
The sale is declared in the tax return for the year you sign the deed. If you sign in December 2026, it goes in the 2026 return, filed in 2027. If you sign in January 2027, in the 2027 return, filed in 2028.
Who pays the 2027 IBI if I sell in January?
As far as the City Council is concerned, whoever owned the property on 1 January 2027, that is, you. But the Supreme Court accepts that the seller can pass the proportional share on to the buyer, unless agreed otherwise. It is best to put a daily split in writing in the arras contract and in the deed.
Does the plusvalía municipal change on 1 January 2027?
Not because of the new year. It is calculated with the coefficients in force on the day of the deed and the whole years of ownership. Royal Decree-law 29/2026 sets new maximum coefficients, but it depends on the validation vote scheduled for 12 November, so check the table in force before signing.
What happens if I turn 65 in January and sell my main home?
The income tax exemption for over-65s requires you to have reached that age on the date of the sale, which is generally the date of the deed. If you sign before your birthday you cannot apply it, although you can apply others, such as reinvestment. Also check that you meet the main-home requirements.
Does the 2027 reference value change what I pay as the seller?
Not directly. The reference value is the minimum base for the ITP paid by the buyer, not for your plusvalía municipal or your income tax. A January deed will use the 2027 value and a December deed the 2026 value, and that may influence the buyer's offer.
Can the buyer ask me to sign in January because of the 4% ITP?
They can ask, and you decide whether it suits you. The reduction for under-40s has been announced, not approved: it is part of the 2027 budget law. If you agree, set a deadline with some leeway in the arras contract and what happens if the reduction does not apply.
Who pays a special levy approved before the sale?
Under the Ley de Propiedad Horizontal (Spanish Condominium Act), levies for improvements are paid by whoever owns the property when they become payable. If they are collected after the deed, they would fall to the buyer, unless you agree otherwise. It is wise to put the split in writing before signing.
Sources
- Real Decreto-ley 29/2026, of 6 October, adopting urgent measures to protect the social function of housing and expand the supply of affordable housing, consolidated text (BOE, Official State Gazette, 7 October 2026)
- Real Decreto-ley 26/2021, of 8 November, adapting the Local Finance Act to the Constitutional Court's case law on the plusvalía municipal (BOE, 9 November 2021)
- Amendment of the Madrid tax bylaw on the increase in urban land value (plusvalía) for 2024, text submitted for public consultation (Madrid City Council)
- Tax measures in Royal Decree-law 29/2026 on housing (Economist & Jurist, RocaJunyent-Gaona, 15 October 2026)
- Congress plans to vote on the housing decrees the day after the general strike and the eve of the campaign (Europa Press in Infobae, 16 October 2026)
- The City Council lowers the IBI to 0.4%, the lowest level allowed by law (Diario de Madrid, Madrid City Council, 15 October 2026)
- The Supreme Court confirms the right to pass the IBI on proportionally to the buyer, judgment of 15 June 2016 (Osborne Clarke)
- Real Decreto Legislativo 1/1993, consolidated Transfer Tax and Stamp Duty Act (ITP-AJD), articles 10 and 49 (BOE)
- Díaz Ayuso announces two new tax cuts to help under-40s buy a home (Madrid regional government, press release, 5 October 2026)
- Buying a home will be cheaper for under-40s in Madrid from 2027 (El Diario de Madrid, 5 October 2026)
- Ley 35/2006, of 28 November, on Personal Income Tax (IRPF), articles 12 and 14 (BOE)
- Tax changes for 2025: savings income tax scale after Law 7/2024 (Fieldfisher)
- Sale of the main home by people over 65, specific Income Tax 2025 manual (Agencia Tributaria, Spanish Tax Agency)
- Binding ruling V0035-23 on the over-65 exemption and the date of transfer (Dirección General de Tributos, 16 January 2023, via fiscal-impuestos.com)
- Exemption for reinvestment in the main home, help manual for form 100 (Agencia Tributaria, updated 28 July 2025)
- Ley 49/1960, of 21 July, on horizontal property (Condominium Act), articles 9.1.e) and 17.11, consolidated text (BOE)