Capital gains tax on the sale of your property

Capital gains tax is the tax you are liable to pay on the profits made from the sale of 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 property located in Spanish territory, the tax will be payable, 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%.

Additionally, when you sell your property, to enforce this rule, the Spanish tax authorities withhold 3% of 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 required to pay capital gains tax, you must claim a refund within three months sales.

Capital gains tax in Spain for residents

Remember that you will be considered a tax resident in Spain if you have resided in the country for more than 183 days per calendar year.

As a resident, the applicable Spanish capital gains tax is:

  • 19%for the first 6.000 € profit
  • 21% from €6,000 to €50,000
  • 23% from €50,000

Can I claim tax relief as a tax resident in Spain?

As a tax resident in Spain, there is three different scenarios:

First derogation: Selling your main residence.

  • A property will be considered your principal residence when you have lived there for 3 years.
  • The reinvestment must take place in the space of two years from the date of sale.
  • 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 take advantage of a partial exemption.

Second possible exemption: For anyone aged 65 or over.

If you’re 65 or older, you won’t have to pay capital gains tax when you sell your Principal residence, whether you reinvest the money in a new home or not.

Again, to qualify for this exemption, the property you are selling must be your habitual residence and you must have resided there as a tax resident for at least three years.

  • The reinvestment must take place in the space of six months from the date of sale.
  • The maximum amount that can be invested in the annuity is 000€

Third exemption: Sale of properties purchased before 1995.

  • This deduction will only apply to the proportion of earnings made up to January 2006. Any appreciation of the asset realized after this date will not include reductions and will be taxed at the normal rate.
  • In addition, to qualify for this reduction, the property in question must have been purchased for 000€+.

If your property meets these requirements, you could qualify for a reduction of 11%.

What if I reside and sell my home in the UK/US or an EU country?

You must report the income from the sale on your income tax return. However, it is important to remember that this statement covers the previous year. So, if you sold your house in April 2021, you will have to report it on the following form 720 and tax return (January to March for the 720: April to June 2022 for the tax return).

We strongly recommend that you begin tax planning to avoid possible surprises in the future.

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