Capital Gains Tax in Spain

Article supplied by Arcos & Lamers Asociados

The following information has been compiled in reference to capital gains taxes that might arise from the sale of real estate in Spain.

Which Spanish tax law is applicable if a non-resident sells his property in Spain?

The Spanish capital gain tax that arises from the sale of a property for non residentsis not subject to the rules of IRPF (income tax for individuals) but tothe rules set forth in the law on IRNR (income tax for non-residents), known as the “Impuesto Sobre la Renta de No Residentes”.

What is the major new tax introduced for non-residents in Spain?

In order to facilitate the free circulation of citizens within the EU and EEE, a tax payer who is a non-resident in Spain is allowed to be exempted from the tax oncapital gains that arise from the sale of what was their habitual residence in Spanish territory, provided that this sum is being reinvested in a new habitual property.Nevertheless, the obligation of paying the three per cent remains valid.

What are the tax rates in Spain?

The tax on the capital gain obtained from selling property by non-residents without permanent establishment, whether individuals or legal entities, is 20per cent in 2015 and will be reduced to 19 per cent in 2016. In regards to the capital gains on selling elements of your equity, the percentage varies according to the year in which it becomes payable. As a guide, for year of reference…

2003-2006: 35 per cent

2007-2009: 18 per cent

2010-2011: 19 per cent

2012-2014: 21 per cent

Finally, with regards to capital gains, always remember the following:

• Application of the update coefficients, to correct the acquisition value of the property based on the date of purchase, has been removed.

• The coefficient of “abatement” (“abatimiento”) is maintained.In order to apply these reduction coefficients, a maximum sale price of € 400,000 for the property in Spain is required.

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