Non-residents selling property in Spain are subject to a 24% capital gains tax, except for those residing in another European Union, Iceland, or Norway country, where the rate is reduced to 19%.
Since 2015, individuals from European Union or European Economic Area countries with tax information exchange agreements with Spain may benefit from a reinvestment exemption. The new habitual residence doesn’t necessarily have to be in Spain.
For Spanish residents selling property, capital gains tax is applicable after deducting expenses. For the initial 6,000€, the tax rate is 19%, rising to 21% for amounts between 6,000€ and 50,000€, and 23% for amounts exceeding 50,000€. Other gains and investment income must also be considered in tax calculations.
If the property served as the main home for at least three years and you’re a Spanish resident, no capital gains tax is levied if you are either over 65 or reinvest the full sale proceeds in a new main home within two years.
The “plusvalía,” a local tax on land value growth, is considered a disposal cost for calculating mainstream capital gains tax in urban areas.
EU residents can credit taxes paid in Spain against their home country’s tax liability under the double tax treaty terms.
Taxes on Death In case of death or gifting during one’s lifetime, Spanish succession tax applies, irrespective of residence. Non-residents or residents of fewer than five years are subject to state rules, with spouses and children eligible for a deduction of just under 16,000€ per beneficiary, taxed at progressive rates from 7.65% to 34% on the excess. Unrelated individuals face higher taxes.
For Spanish residents, each Autonomous Region can set its own succession tax rates and exemptions, leading to variations across regions.
Spanish SL Companies Contrary to popular belief, using a Spanish SL company to structure property ownership doesn’t shield against inheritance tax in Spain. Beneficiaries are responsible for paying taxes on the deceased’s estate. Whether inheriting SL company shares or the property directly, inheritance tax still applies in Spain.
Disclaimer
Please note that the laws change very often, and although I have done all I can to correctly interpret the law, the above is in no way full legal advice, but my interpretation of the law, and it does not substitute the legal report of a lawyer.
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