Taxes when Selling Spanish Property

This is the discussion thread for the article Taxes when Selling Spanish Property

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Surely, the EU law reduced this unfair tax and Spain complied this year 2008 with the new law, therefore you need to update your site.

[Lawbird Lawyer]

Dear Sir,

You are absolutely correct.

After a protracted process grounded on discrimination the European Commission forced Spain to equate the Capital Gains Tax for residents and non-residents alike leaving it at 18% as from the 1st of January 2007 not as from 2008 as you mistakenly write.

We don't update old articles; we publish new ones with the new laws that are passed and we always include the date when they are published. The reason is that we have been publishing articles for over a decade and we can ill afford the time to amend each and every legal article every time a new fiscal law is passed, which occurs almost on a monthly basis as new laws are enacted every day and published in Spain's Official Law Gazette (BOE). What really matters is that the companys' lawyers are aware of the changes in law and are always up-to-date.

In any case I confirm we will be writing a new updated article on this matter within the next weeks so as to avoid any further confusions in this important matter.

Which is why it is a good idea to always ask a lawyer to confirm if the tax rates you've read in legal articles dating back years -such as the one you quote- are correct and updated. Quite often it will not be the case.

Yours faithfully,
Raymundo Larraín Nesbitt

Do all pensioners have same rights when selling i.e Spanish and English etc?
Does a pensioner pay tax when selling a property?
If a pensioner has residencia, PADRON, NIE is this sufficient not to pay tax?
Do they need to opt out of Ingles tax system and become fiscal tax resident in Espana?
Kind regards

[Lawbird Lawyer]

Dear Madam,

Owners > 65 years old qualify for a CGT tax exemption on selling their primary dwelling in Spain (must be their main residence, not a second residence).

Owners < 65 y.o. qualify for a roll-over benefit. They will not pay CGT taxed at 18% within the following 2 years subject to them reinvesting the sales proceeds in another property in Spain (or elsewhere) which must be used as their main residence (they must have lived in it the 3 previous years and wil lbe required to prove it providing conclusive evidence i.e. utility bills).

On you speding more than 183 days in Spain you will become a fiscal resident and are subject to be taxed on your Worlwide income. This includes your UK pension, yes.

A pensioner pays taxes on selling property, yes, Capital Gains Tax and Plus Valía tax with the exception above.

Having residencia, NIE and Padrón makes no difference in you being liable to pay taxes on selling property. It will however affect your IHT bill. Being tax resident in Spain will make it unnecessary the buyer retains 3% of the sales proceeds on account of your CGT liability.

In any case foreigners who live in Spain should join the Padrón:


Embassy encourages foreigners to register on local ‘padrón’

Benefits of registering include tax reductions, access to social care and discounts
26.08.09 -

Yours faithfully,
Raymundo Larraín Nesbitt

Can you tell me please, if you have owned your property for less than 3 years when you sell (non-resident), are you liable to pay higher tax?

By that I mean, is there a set number of years defined where if a seller has owned the property for less than that number of years (as a non-resident) when he/she sells, are they liable to pay higher tax?

[Lawbird Lawyer]

Dear Jenny,

No, it is not the case. You pay 18% CGT.

Yours faithfully,

If I were to sell my property in Spain I understand I'd have to pay CGT.

I live in the US now, so when I pay CGT in Spain, the US can't tax me on any of the money if I send it over here over a wire transfer, right?

[Lawbird Lawyer]

Originally Posted by John Connor

If I were to sell my property in Spain I understand I'd have to pay CGT.

I live in the US now, so when I pay CGT in Spain, the US can't tax me on any of the money if I send it over here over a wire transfer, right?

Dear Sir,

That is incorrect. In the case of UK citizens, with which I'm more familiar, they may have to pay CGT twice on selling Spanish property. Both to the Spanish Tax Office and also to the HMRC depending on how much is their UK tax rate.

I'm unaware of the IRS but I suggest you query a US lawyer in the state where you live on this matter as you may be required to pay CGT twice (taxed on the difference in the US).

Yours faithfully,
Raymundo Larraín Nesbitt

i am non-resident in spain i brought holiday home in 2000.in2007 i brought a larger house but could not sell holliday home,i now have buyer for holiday home,can the profits and taxes be offset against property brought in 2007. yours faithfully carole

[Lawbird Lawyer]

Dear Madam,

You are querying in relation to post number 4?

This will not be your case as it was not your main residence following your own post, it was a holiday house.

The roll-over benefit wouldn't apply to you as it was not your main residence.

Yours faithfully,
Raymundo Larraín Nesbitt