Spain Explained

Changes to Spanish capital gains tax

It’s perhaps a symptom of government austerity that taxation is a particular target for change. It is one of the best means of increasing revenue but must also be handled carefully if your electorate are not to be upset as an election year approaches.

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As the Spanish government has the ballot box in its sight it must continue to bring in the money and balance the books. The dilemma is how to keep the population happy (or at least not too unhappy). It seems as though changes to capital gains tax in Spain are a legitimate target.

As some people are feeling the pinch and taking the decision to sell property, so the question of how much Spanish capital gains tax they might need to pay becomes an important one.

In this article we will go through some relevant information regarding changes to capital gains tax. However, we would like to remind you that taxes in Spain can be complicated and you could be subject to fines or penalties if you miss a deadline or don’t do your taxes properly. Advisably, you should seek fiscal advice from an expert to avoid possible complications.

Changes to capital gains tax in Spain

The bad news

The value of your property generally increases over decades and allowance has, until now, been made for this in calculating capital gains tax.However, from January 2015, it is proposed that inflation will no longer be taken into consideration and the original price of the property will be used to calculate capital gains instead.

So, for example:

Before 31st December 2014From 1st January 2015
Original price of house in 199075,000 €75,000 €
Sale prices of house116,000 €116,000 €
Taxable amount10,459 €41,000 €
Capital gains tax to pay2,375 €8,900 €

A difference in the amount of capital gains tax to pay of 6,525 € a significant amount and one that people, with an option, will want to avoid. It is anticipated that this change will lead to those contemplating the sale of a house in Spain doing it sooner rather than later.

The good news

To compensate a little for this, the tax rates for income tax and consequently capital gains tax are being reduced. Below, the chart shows the anticipated changes:

2014

Amount of capital% of CGT
0 – 6,000 €21%
6,000 – 24,000 €25%
24,000 € +27%

2015

Amount of capital% of CGT
0 – 6,000 €20%
6,000 – 50,000 €22%
50,000 € +24%

So, for example

Before 31st December 2015
Taxable amount10,459 €
21% on first 6,000 €1,260 €
25% on 4,459 €1,115 €
Capital gains tax to pay2,375€
After 31st December 2015
Taxable amount10,459 €
20% on first 6,000 €1,200 €
22% on 4,459 €981 €
Capital gains tax to pay2,181 €
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For most people the reduction in the % of capital gains tax charged will not compensate for the additional capital gains hike that they may experience when selling an older property.The only people who are really likely to gain, and then by a small amount only, are those selling properties they have bought recently.

In the shorter term we are likely to see a rush to sell. Having too many houses on the market will again suppress house prices and create an imbalance of supply and demand that may take a while to correct. Just at a time when there was a little optimism creeping back into the market.

To help navigate the bureaucracy of the Spanish tax system, our dedicated advisers are on hand to help at every step of the way. Fill out this short form and we will offer you a free consultation without obligation.

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80 comments

Sophie @ Conveyancing Solicitors Coventry

4 October, 2014 6:05 am

This ratio is quite helpful
This ratio is quite helpful for business level with the consumers investment work. Well posted.

Thanks,
http://www.anthonystocktonsolicitors.co.uk/

Colin Granville

12 January, 2015 9:36 pm

Hello, I was under the
Hello, I was under the impression that residents could sell their main property without any CGT, as it is in UK. Is this incorrect? If so, what benefits are there to becoming a resident?
Thanks

admin

15 January, 2015 4:57 pm

Dear Colin

Dear Colin

A Resident who has owned their residential home for more than 3 years as a tax resident and who is over 65 is exempt from paying Capital Gains tax . However, they must still declare the sale in the annual tax declaration. 

Paul Marley

2 March, 2015 11:08 am

as a non resident my Partner
as a non resident my Partner is a bout to buy a derelict property at great price we propose to reform it and sell it the buying price will be low and we should make a good gain but can we offset the cost of the reform works against the capital gain?

Suzanne O'Connell

25 March, 2015 1:12 pm

Dear Paul

Dear Paul

Thank you for you query. To begin with, you should ensure that you obtain the correct permission to carry out the work on the property that you have planned. Any changes to the property will need to be registered at the Land Registry. You will need to pay tax on this but can then set tax paid, against any capital gains payment at a later date. By registering your refurbished property there should be a revaluation of how much it is worth which will bring it more in line with the selling price anyway. 

You should be aware that you might also be charged with complementary tax. Because you have bought at such a reduced price the Tax Authority might argue that you have outstanding tax to pay. You would receive this demand after purchase. We provide more information about this in our article about complementary tax

However, you can appeal against this tax when your receive the notification. 

Mel Sutton

25 April, 2015 12:02 pm

I was under the impression
I was under the impression that owners over the age of 65 who were not prior to capital gains tax when selling their property are now also included in this new taxation. Am I correct.

Suzanne O'Connell

29 April, 2015 9:55 am

Dear Mel

Dear Mel

Residents who are over the age of 65 and have had a permanent residence for over 3 years don't have to pay CGT. The news is that if they sell a second property (not their permanent residence) they could also be exempt from CGT if they buy an annuity with the whole amount. 

Margaret Gooch

30 April, 2015 5:43 pm

I bought my house 3 years ago
I bought my house 3 years ago for 90.000 euros. I am over 65 and fiscally resident in Spain. I updated the property and currently have it on the market and am hoping to sell at 110.000 (after paying estate agent) I have just been told by a solicitor that I will be liable for capital gains on the 20.000 difference. This is extremely important to me as it will affect my ability to move house. It is my only property anywhere and my permanent home.
I need to know the correct information. It would be too late when a bill I could not pay arrived.

Suzanne O'Connell

6 May, 2015 10:52 am

Hi Margaret

Hi Margaret

Thanks for your query. Because you are over 65 are a resident and this is your main residence then you should not have capital gains tax to pay at all. 

Robert Archbold

4 May, 2015 11:01 am

I bought an appt in 2001 in
I bought an appt in 2001 in torreveija for 51000 IRE Pounds and am considering selling I estimate at present value it would be worth around 85-90K euro would I be liable for much Captital Gains, or would the original cost price in pounds be converted to euros when assessing

Suzanne O'Connell

6 May, 2015 10:16 am

Dear Robert,

Dear Robert,

The Euro purchase price, plus expenses is taken into account, against the Euro sale price with expenses. If you are a non-resident 3% of the sale price will be withheld and depending on the capital gains tax due, you will receive a refund or may have extra to pay. 

Martin Moran

1 September, 2015 11:23 am

Understand Euro purchase plus
Understand Euro purchase plus expenses OK.
“Euro sale price WITH expenses”? Is this Euro sale price LESS expenses or PLUS expenses?

Suzanne O'Connell

2 September, 2015 10:59 am

Hi Martin

Hi Martin

Sorry for any confusion. It is euro sale price less expenses.

Jane Johnstone

20 May, 2015 1:27 pm

I am resident in Spain and
I am resident in Spain and paying tax here. I am selling a property in the UK. Where do I pay the CGT and how is this done?

Suzanne O'Connell

21 May, 2015 11:10 am

Hi Jane

Hi Jane

Thanks for your enquiry. You must declare the CGT in Spain and you do this when you make your resident tax declaration in June. Remember that the tax declaration covers your income in the previous year. Therefore a house sold now would be declared in next year's return and not this year's. 

Sarah Parker

22 May, 2015 5:28 pm

I left Spain two and a half
I left Spain two and a half years ago and have been trying to sell my Spanish house. I have heard that from 2015 non-residents are exempt from CGT if they reinvest the proceeds in a house in another EU country, so long as they lived in Spain for at least 3 years. Is this correct?

Suzanne O'Connell

26 May, 2015 1:18 pm

Hi Sarah 

Hi Sarah 

If you have been a fiscal resident for the past three years in Spain then you don't pay Capital Gains Tax as long as you reinvest your funds into a new principal home in Spain. The new purchase must also be your main residence for the following three years. 

G L Sewani

27 May, 2015 10:06 pm

i with my husband bought a
i with my husband bought a house in canary island in 1995 and we lived in the house till 2008.in 2008 we bought a joint property with our children and moved in the new house.the old house which was our main residence was sold last year.we are both above 65 years of age and are spanish residents.are we eligible for the exemption of the capital gain tax ?

Suzanne O'Connell

28 May, 2015 3:50 pm

Hi

Hi

Thanks for your enquiry. As you moved out in 2008 it is not considered to be your main residence now. Unfortunately, because of that it means that there is capital gains tax to pay on it. 

Suzanne O'Connell

4 August, 2015 8:37 am

Hi

Hi

No, you are not exempt as as you are not living in the property at the date of selling it. This means that it would be taxed in the same was as if you were selling it as a second property. 

Paul Guest

29 May, 2015 7:48 am

I am wondering about capital
I am wondering about capital gains if I sell my UK property and then buy a place in Spain which would become our primary residence. Is it simply a matter of selling the property in the tax year preceding becoming a Spanish resident to avoid paying any capital gains to Spanish Government or are there other considerations, thanks Paul

Suzanne O'Connell

4 August, 2015 8:18 am

Hi Paul

Hi Paul

It is always best to sell and finish the tax in the UK and then start in Spain so that Spain does not claim tax from you. Remember that the tax years are different in Spain to the UK. They run from the beginning of January to the end of December. 

Olav

30 May, 2015 7:56 am

I have had a Property here
I have had a Property here since 2002 I am now selling it , at the same time I have been thinking of becoming resident . If I become resident before completion , will I be able to reinvest in another house without taxing ? Or I believe that if I am resident at the time if completion the buyer should not withhold the 3 % , so I then assume I have to declare it on next years tax form , will that make any difference ?
Another question I have rental income in another country how would that be taxed if I’m resident in my country it’s taxed at capital gains at 27 % would it be 20 % here ?

Suzanne O'Connell

4 August, 2015 8:31 am

Hi Olav

Hi Olav

Whether you will be a resident or not when you sell your property depends on the time of the year when you became a resident and the time when you sell. 

To avoid the withholding of 3% you must be able to present a certificate of fiscal residency which you can only obtain from the Spanish tax office if you can prove that you've been here longer than 183 days.If you can not get the certificate you will have to sell as a non-resident and they will withold 3%. You will then have to declare the sale in the tax return as a resident (the year after) and declare the amount as paid 'indebidamente' – incorrectly as a non-resident. 

As you have not lived in the property for longer than 3 years then you cannot reinvest the money because the property is only your permanent residence if you have lived there for longer than three years. 

Rental income from another country is declared like any other rental income in the tax return (remember to do the 720 on the property abroad) and it is added to your income (pensions etc.) If you have paid any tax on that income in the country where the property is then it is normally deducated in Spain as double taxation. 

Ana Louca

2 June, 2015 6:10 pm

Hi
Hi
I wonder if you could clear up a very grey area in regards to CGT. We over 65 and have been living in Spain for 13 years. It is our main residence and we own no other property.
We are currently trying to sell our property in Spain. We recently made the decision to become tax resident and have submitted a tax return for the last year, our certificates are due to arrive soon.
My question is, to be exempt from CGT do we simply need the certificate. We have been paying Renta , do we need full tax returns for the last 3 years?

Suzanne O'Connell

1 July, 2015 10:16 am

Dear Ana

Dear Ana

The answer to this depends on a number of different factors. If you had made a non-resident tax declaration prior to making your resident one, then you would not be exempt from CGT as you need to have been a resident for more than three years. 

If you have not made any type of tax declaration before then much will depend on if you had tax to pay when you submitted a tax return last year. If you did and apply to be exempt from CGT as a resident then you might be subject to an inspection as you should have been paying tax in the previous years too. If you didn't have to pay tax then  you could be under the limit for having to make a resident tax declaration and your application for exemption of CGT could be successful. 

When you go to the notary to sign for the sale then the certificate is sufficient. Remember you will still have to declare the sale on your resident tax declaration and say that it is exempt because it was your permanent residence and you are over 65. 

Joan Jackson

30 July, 2015 9:57 am

I am 60 years old and have
I am 60 years old and have been a fiscal resident in spain for many years and am now thinking of selling. The house in spain is my sole residence with no other property anywhere. I am slowly beginning to grasp the capital gains new law but there is one question which I would like answered and clarified if possible. I read somewhere that if I put all the proceeds of my home in spain into a property in the UK within two years of the sale I will then be exempt from spanish capital gains tax. Is this true? and if it is can you point me to a relevant website to show my gestor? Many thanks

Suzanne O'Connell

11 August, 2015 1:53 pm

Hi Joan

Hi Joan

If you are a taxpayer living in a Member State of the European Union like Spain, then you won't be charged capital gains tax on the principal residence that you sell provided you reinvest all the money from the sale on another principal residence in another European Union country like the UK. If the house you buy does not cost as much as the one you sold then you will be charged capital gains on the difference. 

You can find more information about this in English and Spanish on  the AEAT website on the page about completing the form 210. http://bit.ly/1gwg3BS 

Steve

11 August, 2015 2:41 pm

I have been living in my
I have been living in my present property for 8 years. I have owned the property since the purchase in 1989. I am 70 years old, and now want to sell the property. I have Spanish residencia, but i am not a fiscal resident.
I am aware that i will have to pay the 3 percent holding tax to the state, as i would be declared a non fiscal resident, and its a little too late i think now to make a tax declaration. I also believe, from what i have read, that i will not be liable to capitol gains, and the taxes i will pay are local (plus valia) . I am not sure of my position in respect of being obliged to purchase another house to lower any tax liabilities that i might be liable for. The likelihood is that i would purchase another property as i need somewhere to live, but would want to spend considerably less in order to have some income.Thank you.

Suzanne O'Connell

13 August, 2015 8:37 am

Hi Steve

Hi Steve

You are correct that you will have to pay the 3% retention. As residents, you will then have to declare the sale in a resident tax declaration next year. In theory, as you are over 65 and have been living in the same property for three years and on the date of sale, there should be no capital gains tax to pay as you are exempt. However, your situation is more  complex as you have not presented tax declarations and if you are selling as a non-resident there is no allowance for purchasing another property. It will depend upon whether you can convince them that you have been residents during this time.  

Jean Tregoing

12 August, 2015 4:58 pm

We have lived in our house in
We have lived in our house in Spain for over 11 years and been residents and paying our tax for the same time. When we bought our house we could not speak Spanish and did not realise that a very low value of 75,000 euros was put on the escritura. In reality we paid around 275,000 euros. (We live in Catral). We have now sold for 237,000 euros and are buying another house for 175,000 euros. We are both over 65 years of age and will need to spend some money on our new house to bring it up to the standard that we like. Could you please tell us if we are liable for capital gains tax.

Suzanne O'Connell

13 August, 2015 12:47 pm

Hi Jean

Hi Jean

The good news is that if you have been declaring as residents (IRPF) for longer than three years and are both over 65 years old then you should be exempt from capital gains tax. 

Jean Tregoing

20 August, 2015 1:48 pm

I have been told by a
I have been told by a gestoria that as of January 2015 the law changed and if I now sell my house and buy one of a lesser value I must invest the profit in an annuity to avoid CGT. My husband and I are both over 65 can you please advise if this is true.

Suzanne O'Connell

17 September, 2015 8:09 am

HI Jean

HI Jean

It is not correct what you have been told. You are over 65 and if you are talking about selling your permanent residence ( where you have lived for over three years as a resident) you don't pay CGT no matter what kind of property you decide to buy later. 

Jean Tregoing

28 August, 2015 7:04 am

Thank you for your answer
Thank you for your answer Susanne – I have however submitted another question but to date have not received a reply.

My question is that I have been told that the law changed in January and even when over 65 years of age, any capital gains on a house sale, must be reinvested in an annuity. Is this true.

Kind regards
Jean Tregoing

Suzanne O'Connell

17 September, 2015 8:19 am

What you have been told is

What you have been told is not correct. The exemption of capital gains tax for people over 65 is when they sell their permanent residence (where they have lived permanently as tax residents for over three years). If a person over 65 sells their second property ( a property they don't live in) there is CGT to pay. However, the new law means that they can now avoid CGT on a second property if they invest the whole proceeds of the sale of an annuity. 

Jean Tregoing

14 August, 2015 10:19 am

Thank you for your reply
Thank you for your reply regarding my earlier question concerning capital gains tax for over 65’s. I have been sent a copy of article (Nueva redaccion del articulo 42 RIRPF) (Agencia Tributaria and I do not have a clue what this means!

Can you please help and advise whether it changes anything regarding resident tax payers, over 65 being exempt from capital gains tax when selling a house?

Suzanne O'Connell

17 September, 2015 8:03 am

Dear Jean

Dear Jean

No, this article does not change anything. You are stil exempt. 

Gary

20 August, 2015 7:02 pm

HI
HI
I have been a resident in Spain for 15 years and now want to downsize. My questions is that if I sold my main residence for more than I pay for a new main residence, would I still be liable to CGT on the difference?

Suzanne O'Connell

17 September, 2015 8:12 am

Hi Gary

Hi Gary

If you are not over 65 then, yes, you will still be liable for CGT on the difference. 

Tom Wells

22 August, 2015 11:19 pm

We will sell our principal
We will sell our principal residence in Spain when we are over 65, after 11 years as tax residents and presumably pay no CGT. If we then move into our second home in Spain, which we own currently, and live there for more than 3 years would we pay CGT?

Suzanne O'Connell

17 September, 2015 8:14 am

Dear Tom

Dear Tom

As the law is today, this would be your new permanent residency and if you live there for longer than three years there would be no CGT on that either. 

Kit

18 September, 2015 11:33 am

Having inherited half and
Having inherited half and apartment in Spain 9 years ago, when it was worth 170,000 euros, I paid the taxes etc, and had to wait until the owner of the other half died before it could be sold. He has now died, his son has inherited, so I am waiting now for the formalities so we can sell. Can we sell before the other person has paid their tax? Do I have to pay anymore tax (bearing in mind that it is now worth around 80,000 euros)?

Suzanne O'Connell

1 October, 2015 7:38 am

Dear Kit

Dear Kit

No, you can't sell before the other person has paid their tax however, you can market the property to find a buyer. You sell when the inheritance deed is signed and registered and the tax is paid. However, sometimes it is possible to sign the inheritance deed and sale deed on the same day. 

You shouldn't have any more tax to pay. You only pay capital gains tax on the sale if you have made a profit. 

Mr Pell

28 September, 2015 9:34 pm

Hello. I have been a client
Hello. I have been a client of Abaco, my will was prepared by your company.I sold my Spanish property a year ago in Villamartin and 3% was retained. I did not make any profit from the sale but have not paid my last years non residence tax. Will this affect my refund? When can I expect my refund ? Thank you

Suzanne O'Connell

7 October, 2015 9:41 am

Dear Mr Pell

Dear Mr Pell

You will only receive a refund if you have presented the capital gains tax form 210-H. This form should be presented within three months of the sale. With this you have to present the last four years of non-resident income tax. From the date that it is presented it takes about a year to be refunded. 

Mark Lowe

30 September, 2015 8:16 pm

Hello, I am in the process of
Hello, I am in the process of selling our first house we purchased in Spain in 2003. We paid 99,000eu for it, but on the deeds the declared price was 72,000eu. We are selling it for 92,000eu. We have an outstanding mortgage of 88,000eu on this property and so in reality once we have paid off the mortgage and expenses there will be not a lot left. Are mortgage payments taken into account when selling the house as obviously we have made no profit. Clearly we will not have anything left to pay capital gains tax on my next tax return. We are residents, and now live in our second house that we purchased in 2006.

Suzanne O'Connell

7 October, 2015 10:56 am

Dear Mark

Dear Mark

The mortgage is not taken into consideration when it comes to paying capital gains tax. Your CGT will be calculated on the basis of a purchase price of €72,000 and selling price of €92,000 with the cost of sale and purchase being deducted. You will have to pay CGT as you are not reinvesting in another property. 

p

13 October, 2015 11:15 am

I am non resident in Spain. I
I am non resident in Spain. I hope to sell my property – which I purchased in 2002 for 100K – for 175K, then buy another Spanish holiday home for 160K.
I am told I will have to pay around 15K tax on each transaction, meaning a 30K tax liability on the whole exercise…… is there another way, or is this correct?

Suzanne O'Connell

14 October, 2015 10:56 am

I’m afraid that as a non

I'm afraid that as a non-resident you do have to pay this amount of tax. 

Sally

23 October, 2015 3:07 pm

I have a UK property that was
I have a UK property that was my primary residence for 4 years (2002-2006). I moved to Spain and purchased a property here in 2007 without selling the UK property (it has been rented out since then). This year I sold my UK property and used all of the proceeds to purchase another property in Spain which is now my primary residence. Am I exempt from CGT? I am under 65 and have been fully Spanish resident for over 5 years.

Suzanne O'Connell

27 October, 2015 9:18 am

Dear Sally

Dear Sally

Thanks for your enquiry. Unfortunately you are not exempt from capital gains tax in Spain. In Spain, the only property that you would be exempt from paying capital gains tax on would be one you have been living in for at least the last three years and if you are over 65 years old. 

Dave

2 December, 2015 5:56 pm

In 2004 we bought a property
In 2004 we bought a property for€165000, it is now for sale at €230000. We are residents and have paid taxes for 3years. We are not tax residents how much cgt will we have to pay. Can we back date the taxes if 3 years is not enough.

Suzanne O'Connell

22 December, 2015 11:10 am

If you have been making a

If you have been making a resident tax declaration for more than three years and you have lived in the same property during that time then you should count as being tax resident. The amount of capital gains tax you will pay then depends upon whether you are over 65 or not. If you are, then it is likely that you will be exempt. 

Jonathon Anderson

16 January, 2016 7:41 pm

I am really confused about
I am really confused about this. I have been tax resident in Spain for 11 years. I bought our house in October 1989 and the house is now worth around €200,000. I will be 65 at the end of this year. Would I lose too much in capital gains tax if I sold next month?

Suzanne O'Connell

19 January, 2016 11:53 am

Dear Jonathon

Dear Jonathon

The short answer is, yes you would. If you sell next month you will not be exempt from capital gains tax. If you wait until you are 65 then you will. 

Laura

17 January, 2016 7:54 pm

Hi, we bought a property in
Hi, we bought a property in the UK in Dec 1999 for £55k. We lived in it until Jan 2008 when we moved to Spain. We rented in Spain initially and then bought a property in June 2012 which we now live in. The property in the UK is now worth about £175k. As we are tax resident in Spain, I know we will have to pay CGT if we sell it, but how is this calculated? Can we offset the years we lived in the UK property as it was our primary residence (as you can in the UK)? I know we can deduct purchase costs and any improvements etc but I have barely any invoices for this so the gain would not be reduced much in this way. Also, is there any deduction for mortgage interest? Thanks

Suzanne O'Connell

19 January, 2016 11:57 am

Dear Laura

Dear Laura

Unfortunately you are not able to offset the years that you lived in your house when it was a primary residence. Neither can you deduct for mortgage interest. As you mention, you can deduct purchase cost and any improvements but you must have the invoices for the improvements you've made. 

George Barnes

20 January, 2016 9:43 am

I bought an apartment in
I bought an apartment in Marbella in May 1981 and sold it in April 2009. The apartment was bought for around £17000 and paid in pesetas. I sold it in 2009 for some €120000 . Should I have paid CGT on the 3%
I only received my payment of some €1300 in September 2015 after much badgering and legal threats
The question is should I have paid CGT at all on a property bought before 1986 ?
Yours truly

George

Suzanne O'Connell

20 January, 2016 12:53 pm

Dear George

Dear George

The answer is that, yes, there would have been Capital Gains Tax to pay on the property sale. 

A Edmondson

29 January, 2016 11:23 am

I took up employment in Spain
I took up employment in Spain in 2012,Spanish taxpayer and took permanent residency.I sold my house in UK and bought a house in Spain.In June 2015 I obtained a better job back in UK and returned there and now live in rented accommodation pending the sale of my Spanish house.I understand that if I use the whole of the net sale proceeds to buy a house in the UK I will not pay Spanish CGT because the reason for returning to UK and selling my house is due to change of employment.Can you please advise.

Suzanne O'Connell

2 February, 2016 11:21 am

Hello

Hello

The rule about not paying CGT will only apply if you have been living in your property in Spain for more than three years and during that time have presented declarations as a resident in Spain. This is important as it only applies when you can demonstrate that you have sold your permanent residence. It will be best if you contact your tax adviser to receive specific advice as your eligibility can vary according to different circumstances. 

Don Rogers

9 February, 2016 7:00 am

My wife and I are separating,
My wife and I are separating, We are Spanish tax resident, and have our primary home here. We also have a small property in the UK, in my wifes name. We are going to sell the UK property to finance the purchase of a more expensive primary home for my wife in Spain. Can we still claim no CGT liability under the re-investment in a new primary home rule even though the property being sold was not previously my wifes primary residence?

Suzanne O'Connell

16 February, 2016 9:42 am

Dear Don

Dear Don

Unfortunately as you are not living in the property you are selling it is not exempt from capital gains tax. 

Debbie Lavelle

15 February, 2016 12:44 pm

I have had a capital gains
I have had a capital gains tax bill of €1360. after selling my flat two years ago in Marbella. I paid complimentary tax of €9000 a few months after the purchase, but I have been told that this is not allowed to be offset in the calculation for capital gains. I have a made a loss if you include the complimentary tax, but still was charged a capital gain. Please explain why this cannot be taken into consideration?

Suzanne O'Connell

16 February, 2016 11:06 am

Hi Debbie

Hi Debbie

The amount paid as complementary tax can be added to the purchase price as it is a cost connected to the purchase. 

david shillington

18 February, 2016 1:53 pm

I am a UK resident, currently
I am a UK resident, currently considering retiring to Spain. The UK HMRC have recently changed the rules, whereby if I, as a Spanish fiscal resident, then sell one of my UK rental properties, I will be required to pay UK CGT on the difference between its sale price and its market value as at April 2015, even though I bought the property considerably before that date. How will the Spanish Revenue expect me to calculate the Spanish CGT and what is the impact on my tax bill of the double taxation treaty between UK and Spain?

Suzanne O'Connell

25 February, 2016 12:58 pm

Dear David

Dear David

Your Spanish CGT will be calculated according to 

Final sale figure – true purchase price = net profit

1. The true purchase price 

This will be calculated from purchase price (as written on the Title Deed) with some costs incurred in the purchase added to it.

The purchase costs that will be taken into account include VAT, Land Registry fees, Notary fees, Transmission tax and legal fees.

2. The final sale figure

This will be calculated from the current selling price with the costs incurred during the sale deducted. This would include your legal fees for example. Some costs of major structural alterations made to the property can also be deducted However, you will need to be able to produce the official receipts for the materials and work involved.

Any tax you have already paid in the UK will also be taken into consideration when your Spanish CGT is calculated because of the double tax treaty.  

 

Jon Hazell

19 February, 2016 12:10 pm

Hello,
Hello,

We moved to Spain in 2011 and have been living and working and presenting tax returns every year – so for the time Jan 2012 – now have been Spanish tax resident.

Our house in the UK was rented for the whole time we have been living in Spain. We purchased our UK house in 1999 for £200,000 and sold it in 2015 for £450,000. When we were living there (1999 – 2011) we had an extension built that cost £30,000. So a net gain of £220,000.

As it was our main home for the time we were living in the UK( 1999 – 2011) are we liable for any Spanish capita gains tax on the sale ? if so on what percentage of the gain and at what rates ?

Any thoughts appreciated.
Jon

Suzanne O'Connell

25 February, 2016 1:01 pm

Hello Jon

Hello Jon

As you are resident in Spain, the Spanish Tax Authority will not consider the sale of your house in the UK as the sale of a permanent residence even though it was this when you lived there before moving to Spain. This means that you will be charged the same amount of capital gains tax as if this was your second home. 

Chris warren

24 February, 2016 8:57 am

Hi hope you can help us we
Hi hope you can help us we are being told so many different things ! We sold our house in Spain in August 2015 for €265,000 brought it for €185,000 as a ruin spent €120,000 reforming and making it legal we have all receipts and new escritura so we have a loss of around €40,000 so do we have to pay any capital gains tax ??? We now have moved back to Spain and we were residents in Spain
Many thanks
Chris

Suzanne O'Connell

25 February, 2016 12:51 pm

Hello Chris

Hello Chris

You probably will not have to pay any capital gains tax but you will need to have proper invoices for the work that has been done to your property.

John

13 March, 2016 5:33 am

My wife and I are both over
My wife and I are both over 65. In March 2015 we took Residencia but have not yet submitted any tax returns. We want to sell the property in UK that has been our home / main residence since 1999 and buy a smaller property with our property in Spain becoming our home. What CGT will we be liable to pay?

Suzanne O'Connell

22 March, 2016 8:35 am

Dear John

Dear John

You would be subject to full capital gains tax on the sale. This is because until recently you were not classed as being resident in Spain. As a non-resident you cannot be exempt from capital gains tax. 

Ann Shaw

23 March, 2016 3:30 pm

We will be selling our UK
We will be selling our UK home, our permanent residence and moving permanently to Spain. We will use the proceeds to buy a home in Spain.
Can you confirm that there is no CGT liability. I will be over 65 and we lived in the Uk property for many years.
Thank you for any advice.

Suzanne O'Connell

6 April, 2016 7:31 am

HI Ann

HI Ann

I'm afraid to say that there will be CGT liability. As the property is not in Spain it isn't classed as your 'vivienda habitual' in Spanish tax law. Permanent residence is where you have lived three years as residents in Spain. 

Francis Robinson

30 May, 2018 5:25 pm

I am resident in Spain and
I am resident in Spain and own a 2nd property in the uk, what rate of capital gains is payable hear in Spain if I sell my UK property.

Suzanne O'Connell

5 June, 2018 1:44 pm

Hi Francis

Hi Francis

It is the same as if you sold a property in Spain. It is based on:

 up to €6,000 = 19%

from €6,000 – €50,000 = 21%

above €50,000 = 23% 

 

Peter D

9 February, 2020 3:10 pm

What about selling a properts with a loss?
//Peter, resident more than 3years and order than 65

Oscar Paoli

10 February, 2020 4:55 pm

Hi Peter,
If you sell a property with a loss and you can prove this to the tax authorities no capital gains tax will be paid or course.
Kind regards,
Ábaco Advisers