Search:     Go  
The Spanish Lawyer Online
The Spanish Lawyer Online

What is the capital gains tax on the sale of a property in Spain?

Tax Law

Francisco Garcia Ramirez

13th of February 2000

Q. We are interested in buying property (probably a house in Andalucia) in Spain. Could you tell us the capital gains tax that we might face when we sell it in future? We have not yet decided whether we would want to be resident or non-resident there. Would there be a huge difference in the tax consequences? I am from the US.

Mrs. Zapella

    A. I inform you that your Capital Gains Tax is assessed regardless of your nationality. Only the issue of residency for tax purposes is taken into consideration. A non resident will pay 35% on the net gain after selling, as opposed to a resident, which will pay 20% on the net gain. Also, a non resident will have a 5% of the sale price withheld by the buyer on account of the Capital Gains Tax. This obligation on the buyer was implemented to avoid tax loss from non residents which would sell and not pay tax. After the tax liability is assesed, a refund may be available, as the case may be.

    It is common in Spain to under declare the real selling price to mitigate the captital gains tax liabilities: vendors tend to impose that payment will be by draft or cheque and a fraction in cash. This practice, although illegal, is quite normal.

    Other than that, if you are resident in Spain, you will pay taxes for your worldwide income. If not, only for the income derived from a business in Spain, plus property taxes, which also differ slightly from the equivalent taxes paid by Spanish residents.

Featured Links: Apply for your Spanish NIE Number
© 1999-2024 Professional Ideas SL All Rigths Reserved - Copyright Notice    - Interesting Resources | Glossary | Terms of Use | Contact Information Contact Details    
Professional Ideas SL CIF: B92930627 - Tomo: 4505 - Libro 3414 - Folio 196 - Hoja MA-97033