Non ResidentSpanish PropertyTax in Spain

Selling property in Spain as a non resident

There are different implications when selling a property in Spain as a non-resident as opposed to a resident. We refer to a non resident from a tax point of view when you are not declaring world-wide income and wealth in Spain because you live permanently in another country.

Capital gains derived from the sale of a property is subject to 19% tax. There is no tax exemption for selling over the age of 65 nor for re-investing in another property.

When you sell the buyer will withhold 3% of the sales price and pay this to the Tax Authorities within one month of the purchase-sale after signing in front of the Notary. It is important they give you a copy of the receipt (Form 211) so that you can present your capital gains tax return, which must be filed within four months after the sale.

Another tax to be paid when you sell is based on the increase of the value of the urban land (IIVTNU) otherwise known as the “plusvalia municipal”, a local council tax. The Supreme Courts have ruled that if there is no increase in value then there should be no tax should be charged.

Capital gains tax calculation:
Sales value less purchase value = Capital Gain.
Sales value = Sales price less sales costs (lawyer fees, plusvalia tax, translator, agent’s commission etc.)
Purchase value = Purchase price plus purchase costs (lawyer fees, transfer tax, translator, Notary and Registry fees etc.)

If you have carried out structural work (new garage, new pool, additional bedroom etc) on the property since the original purchase, which increase the value of the property then you will be able to include these costs in the CGT calculation and reduce your tax Note that internal reforms such as tiling floors, repairs, new windows/doors etc. are not considered as structural work and can not be included in the CGT calculation.

This article might also be of interest to you Non residents – Tax on rental income

If you are thinking of selling a property or need our assistance after the sale please contact EBF Consulting