Residents and non-residents have to pay a capital gains tax when they sell their properties. According to Marbella Lawyers : 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 assessed, a refund may be available, as the case may be.

The CGT is calculated based on the profit minus any inflationary considerations for the period that the property was owned.

There are a few case for exemptions according to HOMEESPANA :
Residents over 65 yrs old selling their principal residence of three years are not liable for capital gains tax in Spain.

Residents who reinvest all of the proceeds of sale to purchase another principal residence can get capital gains tax relief, provided they have lived in the property for 3 years or more.

If they use only a portion of the proceeds from a property sale, they will get a percentage relief up to the amount reinvested. (rollover credit)

Now, you have to take into account the black money things like I replied to an earlier post.

“If for example, you buy a flat for EUR 150,000 but only declare EUR 75,000, and the real value increases to EUR 200,000, your capital gains tax will be based on the difference between the two declared figures (20% or 35% of EUR 125,000 not EUR 50,000).”

Some good news for the future, according to Today999, Spain has been formally asked by the European Commission to change legislation concerning the taxation of non-residents’ employment-related income, capital gains realised by non-residents and taxes on the raising of capital. The treatment between residents and non-residents has been judged unfair.


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