Taxation
Taxation
Warning: The information set out below is a general guideline provided by DOMENECH ABOGADOS. Specific advice should be sought before any action in reliance on it is taken, as explained more fully in this website's legal notice.

          Property in Spain: what non-resident should know about tax on capital gains
           
from the sale of Spanish property

From 2012 onwards, a 21% flat rate (formerly 19%) is applicable to capital gains obtained by non-residents on the sale of Spanish real estate.  This rate applies to the taxable base resulting from the difference between acquisition value and transfer value.

But finding out the acquisition price and the transfer price for tax calculation purposes is not that simple, since it involves:

  • (a) adding certain amounts relating to expenses and taxes inherent in the acquisition;

  • (b) determining the tax impact of any relevant subsequent building works
    or improvements made on the property;

  • (c) establishing whether any depreciation charges must be subtracted,
    which diminish the acquisition value for tax purposes;

  • (d) applying an updating coefficient which varies depending on the date the acquisition was made;

  • (e) if the property was acquired before the end of 1996, determining whether
    any reduction on the tax gain could apply;

  • (f) establishing the local capital gains tax due to the town hall where the property is located, which decreases the transfer price for tax purposes.


The tax and property team at DOMENECH ABOGADOS can do all the relevant calculations so that you can know in advance what to expect on Spanish taxation. They’ll assist you from the contract stage (with deposit payment) through to completion of the sale, and subsequently they’ll file the relevant M-210 form on your behalf in order that any tax due on the capital gain obtained can be properly paid - and in time. 

If appropriate, DOMENECH ABOGADOS will ensure that you can claim back any amount the Spanish tax authorities may owe you - which can happen particularly if you bought many years ago and can benefit from significant tax reductions - since your buyer must withhold 3% of the sale price as a down-payment towards any eventual tax liability on capital gains and such 3% figure may exceed your liability.

Therefore, if you are thinking of selling your property and want to know in advance what to expect in Spanish tax terms, contact us and we will work out for a reasonable fee your exact tax liability and, if you wish, provide you with a competitive budget in order to assist and advise you throughout the entire sale process to completion  -with the important assurance that we will be acting exclusively on your behalf and not in the interests of anybody else. 


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