When you sell a property in Spain you have to pay capital gains tax on any profit after taking into account all deductions and allowances.
Deductions and allowances are quite complicated and vary by autonomous region so you will need to consult a local tax specialist for more information.
Capital gains tax rates in Spain
Capital Gains Tax (CGT) rates in Spain have changed in recent years. The following tables show the present CGT rate (final column to the right), and also give previous tax rates to help clarify the confusion surrounding this topic. Most of the websites you will find doing an internet search do not give you the latest, updated tax rate.
Capital Gains Tax on Spanish Real Estate
The following only applies to E.E.A. and EU-residents. Residents from outside the European Union pay 24% in general (there are some exceptions).
GGT rates on real estate assets sold in Spain by EEA/EU residents have changed over the years as follows (tax rate at time of sale):
|PERIOD||TAX RATE %|
|Up to 31/12/06||35%|
|Up to 31/12/07||25%|
|2015||Up to 11-Jul 20%, From 12-Jul 19.5%|
19% is the current rate, but it’s more complicated than that. EEA/EU vendors who are NOT resident in Spain at the time of sale pay a flat rate of 19% CGT, but EEA/EU vendors who ARE resident in Spain at the time of sale pay a sliding scale starting at 19%:
|Capital Gain in Euro||Fist €6,000||€6,000 – €50,000||Above €50,000|
|CGT Rate %||19%||21%||23%|
You can check the latest rates at the Tax Agency website here.
3% retention or withholding tax when vendor is non-resident
When the vendor does not reside in Spain, the buyer has to pay 3% of the price to the tax authorities as a CGT withholding tax retention (to cover the vendor’s capital gains liability), so if you are a non-resident vendor you don’t get your hands on all the money until long after the Spanish tax man is satisfied that all tax has been paid.
Stories abound of non-residents having problems reclaiming the capital gains retention with the tax authorities refusing to believe they have sold at a loss, or dragging their feet about returning any funds due, sometimes for years. See what others are saying about this subject in the forum discussions on the Spanish 3% CGT withholding / retention tax.
When buying property in Spain, always keep digital and hard copies of all invoices related to your purchase like legal fees, notary fees, and property register fees. Likewise, if you ever do building work on the property once you own it, keep copies of all licences and invoices. You may be able to offset these expenses against capital gains when you sell, and so reduce your Spanish capital gains tax on property sales.
Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. Laws and tax rates change over time, so this information may be out of date. Please consult a tax specialist or the tax authorities for the latest information. There are no guarantees that this information is correct and up-to-date, so you use this information at your own risk.