The following article is taken from Eye on Spain,

Do I Need To Pay Capital Gains Tax In Spain?

Q:  I am selling my Spanish house do I need to pay Capital Gain Tax? Is there any difference if I am Tax Resident or Non Tax Resident in Spain?

A:  In order to know if you will have to pay Capital Gain Tax (CGT) (Ganancia Patrimonial) the first thing that needs to be checked is whether or not you had a gain (profit) in the sale.

The law in SpainThis means that the acquisition cost/value (price, taxes, notary fees, land registry fees, and other costs e.g. legal fees that you paid when you bought the house) is less that the transmission costs/value (selling price, less plusvalia, , agents fees, etc that you paid when you sold the house).

Please notice that the acquisition cost/value must be up dated as per the coefficient approved each year, and there are also special rules that apply if you have purchased the property before 31/12/2004.

The Capital Gain Tax (CGT) that should be paid will be different between a Tax Resident and a Non Tax Resident in Spain as per the following:

1.- If you are Non Tax Resident in Spain, you must know that the Income Tax Law for Non Residents (RD 5/2004) article 25.1.f) has been modified by means of the Law 26/2009 of 23rd of December, therefore for the year 2010 the CGT has been increased from 18% to 19%.

2.- If you are Tax Resident in Spain, please remember that the Law 22/2009 of 18th of December has changed the CGT for Residents (Law 35/2006) being now 19% (up to 6.000€) and 21% (from 6.000,01€ onwards).This applies for the whole country of Spain except some communities like Basque Country, etc.

But as a Tax Resident in Spain please bear in mind that there are also some important exception of this tax.

RE-INVESTMENT IN ANOTHER HABITUAL/MAIN RESIDENCE: as per the article 38 of the Law 35/2006 if you reinvest the proceeds of the sale of your habitual residence in the acquisition of a new habitual residence, you will not pay CGT.

In this point it is relevant to remember that as per the R.D. 439/2007 article 41, the funds must be reinvested within 2 years from the sale and as per the article 54 it would be considered as habitual/main residence if it has been used as residence for at least 3 years.

WHEN THE VENDING PARTY IS ABOVE 65 YEARS OLD: as per the article 33.4.b, of the Law 35/2006, when a person over 65 years old sells his habitual residence no CGT will be paid. (No need to reinvest the funds in the purchase of a new habitual residence.

Should this be your case or the case of someone you know, we will be more than pleased to assist you.

*The information provided on this article is not intended to be legal advice, but merely conveys general information related to legal issues. 



What about cost of improvements to the property, extensions, swimming pool etc can that be put against the tax? 15/06/2010 21:33:00simon
If I sell for less than I paid does the buyer have to pay the initial 3% of the selling price, because there would be no profit?15/05/2013 17:29:00richard