Capital Gains Tax Spain Explained for Non-Residents
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Buying or selling property in Spain can be a lucrative investment, but understanding Capital Gains Tax Spain is essential for non-residents. Foreign property owners often overlook this key tax, which can impact net profits when selling a property, shares, or other assets. This guide explains everything you need to know about Spanish capital gains tax non non-residents, rates, exemptions, and filing processes, ensuring your transactions remain compliant.
Quick Answer — How Capital Gains Tax Works in Spain
Capital gains tax in Spain is levied on profits made from selling property, shares, or other assets. Non-residents pay a fixed tax rate on the gain after deducting allowable costs. Payment is mandatory before transferring proceeds out of Spain.
Key points for foreign sellers:
- Tax rate for non-residents: 19 percent (EU/EEA), 24 percent (non-EU/UK/US).
- Applies when selling a Spanish property, land, shares, or assets.
- Deductible costs include notary fees, legal fees, renovation invoices, and estate agent fees.
- Payment is required to the Agencia Tributaria (Tax Agency Spain) before fund transfers.
Why Capital Gains Tax Matters for Foreign Property Owners
1. When CGT Applies
Capital gains tax in Spain applies in several common scenarios:
- Selling a house in Barcelona, Madrid, Valencia, Marbella, Alicante.
- Selling land or investment property.
- Transferring assets for profit.
2. Common Seller Situations
Foreigners often encounter CGT in these contexts:
- UK expats selling holiday homes.
- Americans selling investment properties.
- Europeans selling inherited properties in Spain.
For buyers considering investment properties, see Fixed vs Variable Mortgage in Spain.
How Capital Gains Tax Is Calculated in Spain
1. CGT Formula
The calculation is straightforward:
CGT = Selling Price – Acquisition Cost – Deductible Expenses
2. Acquisition Cost Includes:
- Original purchase price.
- Notary fees.
- Land registry fees.
- Legal fees.
- Mortgage arrangement costs.
3. Allowable Deductions
- Renovations with official invoices.
- Estate agent commissions.
- Energy certificates.
- Capital improvements.
4. Depreciation & Coefficient Adjustments
Spain removed inflation adjustment coefficients in 2015, simplifying tax calculations for foreign sellers.
Capital Gains Tax Spain — Rates for Residents vs Non-Residents
1. Non-Resident Tax Rate
- Flat 19 percent for EU/EEA sellers.
- Flat 24 percent for non-EU sellers, including UK, US, and Canada.
2. Spanish Resident Tax Brackets
- 19 percent on the first €6,000.
- 21 percent on €6,000–€50,000.
- 23 percent on €50,000–€200,000.
- 28 percent above €200,000.
3. Why Non-Residents Pay a Fixed Rate
Non-residents fall under IRNR (Impuesto sobre la Renta de No Residentes), simplifying taxation and ensuring compliance.
Exemptions & Reductions for Capital Gains Tax in Spain
1. Main Exemptions
- Reinvestment exemption for residents selling their main home.
- Over-65 exemption if selling a habitual residence.
- Certain inheritance transactions.
2. Exemptions Not Available to Non-Residents
Non-residents cannot claim the reinvestment exemption or over-65 benefits.
3. Partial Exemptions
For assets purchased before 1994, older inflation coefficient rules may apply.
Withholding Tax — The 3 Percent Retention
1. What Is It?
Non-resident sellers are subject to a 3 percent withholding by the buyer, sent directly to the Spanish Tax Agency. This acts as an advance CGT payment.
2. What It Means for Sellers
- Ensures tax compliance.
- If actual CGT is less than 3 percent, sellers can claim a refund.
3. How to Claim Refund (Modelo 210H)
- Apply within 3 months.
- Submit NIE, deed, purchase contract, and receipts.
Selling a Spanish Property — Step-by-Step CGT Process
- Get Your NIE & Tax Documents Ready
- Calculate Profit Using Verified Records
- Prepare the Notary Appointment
- Buyer Pays 3 Percent Retention
- Submit Modelo 210.
- Pay Remaining CGT or Request Refund.
See Buying Property in Spain as a Foreigner for guidance on financing your next purchase.
How Capital Gains Tax Differs by Region
1. Popular Selling Locations
- Selling property in Barcelona.
- Selling a villa in Marbella.
- Selling a flat in Madrid.
- Selling coastal homes in Valencia or Alicante.
2. Why Regional Differences Matter
Certain regions have plusvalía municipal, a municipal tax on property value increases.
Avoidable Mistakes Foreign Sellers Make
- Not keeping renovation receipts.
- Forgetting the 3 percent retention.
- Assuming UK/US tax rules apply.
- Underestimating notary and agency fees.
- Late filing of Modelo 210.
Free Advice on Capital Gains Tax in Spain
1. Why Online Calculators Are Not Always Accurate
- May omit renovation or improvement deductions.
- Often outdated with new Spanish tax rules.
2. When You Should Seek Professional Help
- High-value properties in Marbella, Ibiza, Barcelona.
- Inherited or jointly-owned properties.
- Mixed-use or investment properties.
Spanish Mortgage Considerations After Selling Property
1. Do You Need a Mortgage for Your Next Purchase?
Many foreign investors reinvest proceeds and require financing. Choosing the right mortgage ensures long-term affordability and tax planning.
2. Choosing Your Next Mortgage
- Consider fixed vs variable rates (see our guide here).
- Compare banks: Santander, Sabadell, BBVA, CaixaBank.
- Check foreign income documentation and currency considerations.
Final Verdict — Understanding Capital Gains Tax in Spain
Selling property in Spain as a foreigner requires careful tax planning. Non-residents pay a flat 19 percent (EU/EEA) or 24 percent (non-EU) on gains, with deductions reducing taxable amounts. The 3 percent withholding ensures compliance, while regional taxes like plusvalía may still apply.
With proper planning and expert advice, you can minimize costs, avoid mistakes, and optimize your investment.
Start your next property purchase with confidence. Tharros Brokers helps foreigners access the best mortgage options in Spain and navigate every step of buying or selling property.