Financial News | Capital gains tax in Spain: here's everything you need to know

The capital gains tax for the sale of a property in Spain – April 2024

When you sell a property in Spain and make a profit you will be liable to pay capital gains tax. The tax is applied to tax residents and non-tax residents, although there are some exemptions and discounts depending on your status.

How the taxable amount is calculated

The capital gains taxable amount is calculated on the purchase price less all the costs associated with the purchase, this will include the purchase tax paid, lawyer and notary fees. You can also deduct major renovation work (with invoices). The profit is the difference between this and the selling price, again deducting any costs, such as real estate agent commissions, lawyer and architect fees where applicable.

What you pay as a non-tax resident

As a non-resident there is a flat rate of 19% capital gains tax to pay in Spain. Although, you will be obliged to declare any profit to your country of tax residency and the rate may be higher in this country. If it is, you will pay the percentage difference to your country of tax residency.

At the notary 3% of the selling price will be withheld until you submit a non-resident tax return with the exact figures and the difference will either be refunded, or you will have to make an extra payment.

What you pay as a tax-resident

There is a sliding scale on capital gains tax for tax residents –

Up to 6,000 euros                                           – 19%

Between 6,000 euros & 50,000 euros   – 21%

Over 50,000 euros                                          – 23%

Exemptions

Tax-Resident Over 65

If you are over 65 and have been a tax-resident for 3 or more years and the property has been your habitual home for 3 or more years, then you are 100% exempt from capital gains.

Tax-resident reinvestment

If the property has been your habitual home and you have been tax resident for more than 3 years, then you are exempt by the percentage of re-investment you make into another property. The reinvestment percentage is calculated against the full selling price and how much you reinvest.

For example, if you sell at 500,000 euros and reinvest 250,000 euros you will have 50% reductions in the capital gains tax due. In turn, if you re-invest the full 500,000 euros, then you will be exempt 100% on the capital gains tax due. (there are some deductions from the final figures, such as purchase tax, agent and lawyer costs)

Non-exemptions

If you are a tax-resident under 65 and do not reinvest, or over 65 and the property is your second home and not your habitual home there are no exemptions.

This article is a guide and everyone has different tax obligations. I recommend that you consult a qualified Spanish accountant to advise on your own specific circumstances.