Staff Reporter
Capital gains tax is the tax that you are liable to pay on the earned profits that arise when selling your assets, such as stocks, bonds or property during the calendar year.
How much will I be taxed?
When the object of the transaction is a property situated on Spanish territory, tax will be liable, whether you are a resident or not.
Capital gains tax in Spain for non-residents
When selling a property, the applicable percentage for non-residents is a fixed rate of 19%.
Also, when you sell your property, to enforce this rule, the Spanish Tax Authority withholds 3% from the sale of your property. It is taken directly from the buyer, so you receive 97% of the sale price.
Finally, if you are not due to pay capital gains tax then you should apply for a refund within three months of the sale.
Capital gains tax in Spain for residents
Remember, you will be considered a tax resident in Spain when you reside in the country for more than 183 days per calendar year.
As a resident, the Spanish capital gains tax applicable is:
- 19%for the first 6.000 € profit
- 21% from 6,000 € to 50.000€
- 23% from 50,000€ upwards
Can I claim tax relief as a tax liable resident in Spain?
As a tax resident in Spain there are three different scenarios:
First exemption: Selling your main home.
- A property will be considered your main home when you have lived there for 3 years.
- The reinvestment must take place in the space of two years from the sale date.
- The new purchase must be located in Spain or any other country within the European Union.
- If the reinvestment is worth less than the total amount obtained from the sale, you can enjoy a partial exemption.
Second possible exemption: For anyone aged 65 or over.
If you are 65 years old or over, you won’t be liable to pay any capital gains tax when selling your main home, regardless of whether you reinvest the money into a new home or not.
Again, to benefit from this exemption, the property you are selling must be your regular residence and you must have lived there as a tax resident for a minimum of three years.
- The reinvestment must take place in the space of six months from the sale date.
- The maximum amount that can be invested in the annuity is 000€
Third exemption: Selling properties that were purchased before 1995.
- This relief will only be applicable to the proportion of the gains produced until January 2006. Any gains in the asset’s value made after this date won´t include reductions and will be taxed at the normal rate.
- In addition, to be able to enjoy from this reduction, the property in question must have been purchased for 000€+.
If your property meets these requirements, then could enjoy a reduction of 11%.
What about if I am resident and selling my home in the UK / USA, or an EU country?
You must declare the income from the sale on your income tax return. However, it is important to remember that this declaration covers the previous year. Therefore, if you sold your house in April 2021, you will have to declare it on the following 720 form and income tax return (from January until March for 720: from April to June 2022 for the income tax return).
We highly recommend you to start tax planning to avoid possible surprises in the future.
