Introduction
When you move between countries and sell a property, the tax consequences can be confusing. One of the most common questions property owners ask is how capital gains tax (CGT) in Spain works. CGT is charged on the profit you obtain from selling an asset such as a house. Whether you are a resident or a non resident determines the filing deadline and the tax rate that applies.
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Who Must Pay CGT in Spain?
Residents (people who spend more than 183 days a calendar year in Spain) and non residents are both subject to CGT, but the rates differ. Residents face a progressive scale, while non residents pay a flat rate.
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Resident CGT Rates
Profit range Tax rate
Up to €6,000 19 %
€6,001 – €50,000 21 %
€50,001 – €200,000 23 %
€200,001 – €300,000 27 %
Over €300,000 30 %
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Non Resident CGT Rate
Non residents are taxed at a single 19 % on the entire gain, regardless of amount.
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How CGT Is Calculated
The taxable gain equals the sale price minus the acquisition cost, adjusted for any allowable expenses incurred during the transaction. Typical deductible costs include:
• Renovation or improvement expenses
• Notary fees
• Real estate agent commissions´
• Lawyers fees
Subtracting these costs lowers the base on which the tax is calculated.
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Withholding at Sale
When the property is sold, the buyer’s lawyerretains 3 % of the sale price and pays it to the tax office on the seller’s behalf (using Tax Form 211). This safeguard ensures the tax authority can collect the tax even if they later have trouble contacting the seller.
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Settlement and Refunds
After the tax liability is determined, you will either receive a refund or need to pay any remaining amount. To claim a refund, you must submit Form 210H (or the resident equivalent) within three months of the sale, together with the last four years of non resident income tax filings. Refunds can take up to a year to be processed however after six months of not receiving when the refund finally takes place you will receive it with interest on top.
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Residency Definition
Spending more than 183 days in Spain (or its territories) in a calendar year makes you a tax resident. This status influences which rates and filing procedures apply.
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Exemptions & Reductions
Exemption / Reduction Who Benefits
Primary residence exemption – full CGT exemption for residents over 65 who have lived in the home for at least three years. Residents ≥ 65
Partial exemption for married couples – if only one spouse is over 65, 50 % of the gain is exempt. Married residents
Reinvestment exemption – full exemption if the entire sale proceeds are used to buy another main residence within two years. Residents and non residents
Life annuity exemption – up to €240,000 of gain can be tax free for those over 65 who invest the proceeds in a qualifying annuity within six months. Residents ≥ 65
50 % reduction – applies to properties purchased between 12 May 2012 and 31 December 2012, for both residents and non residents. Anyone meeting the purchase date condition
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Filing Requirements
Residents must report the gain on their annual income tax return, typically filed between April and June of the year following the sale. The gain is entered as part of “savings income” and taxed according to the resident brackets shown above.
Non residents must file a separate CGT declaration (Form 210) within four months of the sale date. Even if the 3 % withholding covers the tax, the declaration is still required to reconcile the exact amount or request a refund later.
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Importance of Documentation
Keep all paperwork related to the transaction, such as:
• Sale contract and purchase agreement
• Receipts for renovations, notary, agency fees , lawyers fees
• Proof of tax payments or withholdings
These documents are essential for accurate filing and for any future audit.
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Why Professional Advice Helps
The process can be intricate, especially if you do not speak Spanish. Errors may lead to fines, penalties, or delayed refunds. Consulting a fiscal specialist with turn into :
a- Verify eligibility for exemptions and deductions
b -Prepare and submit the correct tax forms on time
c- Communicate with the tax authorities on your behalf
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Quick Checklist
1. Determine residency status (≥ 183 days = resident).
2. Calculate the net gain (sale price – acquisition cost – allowable expenses).
3. Apply any applicable exemptions or reductions.
4. File the appropriate tax form within the required deadline (April June for residents, 4 months for non residents).
5. Retain all supporting documents for future reference.
Conclusion :
Selling a property in Spain triggers capital gains tax, but a variety of exemptions and deductions can substantially lower the amount owed. Because the rules are detailed and the paperwork is in Spanish, seeking professional tax advice is strongly recommended to avoid costly errors and ensure.
CAPITAL GAINS TAX WHEN SELLING A PROPERTY IN SPAIN
