Last updated on June 26th, 2020 at 05:07 pm.
When people are selling their property in Spain, they wonder, “do you pay tax when you sell your house?” Generally, this type of taxation falls under capital gains tax (CGT), which can be complex. Capital gains tax applies in most countries when you sell a property. In essence, CGT is a payment on the profit you make. Recently, there have been a number of changes in relation to capital gains tax that have caused confusion amongst foreigners living in Spain.
Considering the property slump, many people will not actually have made a profit from the sale of their home in Spain. However, if you are in the fortunate position of making a profit on the sale, then Spanish CGT can be a big issue. In this article, we address the conundrum of “do you pay tax when you sell your house in Spain?” in more detail. We would also like to remind you that taxation in Spain can be challenging to navigate and you could be subject to fines or penalties if you miss a deadline or don’t do your taxes properly. Advisably, you should consult an expert to avoid possible complications.
Do you pay tax when you sell your house if you’re a non-resident?
If you are a non-resident you will pay 19% capital gains tax in Spain. This was reduced to a standard levy from 19.5% in 2016. To enforce this rule, the Spanish Tax Authority withholds 3% from the sale of your property. This is taken directly from the purchaser so you only receive 97% of the amount the property was sold for. The 3% is a safeguard so that non-residents do not ‘disappear’ before they have settled their CGT account.
If you don’t owe CGT then the 3% will be refunded. However, if more is required then you will need to provide the extra. In order to collect any refund, you need to complete the form 210H. You should submit this form within three months of the sale, along with the last four years of non-resident income tax returns. From the date that you present the documents, you should allow around a year to receive the refund.
What about when you’re a resident?
If you are a resident you must declare CGT on your annual tax declaration. The Spanish Tax Authority will charge capital gains tax according to your overall annual income. There are possible exemptions from capital gains tax if you are a resident. These include:
- If you are over 65 years old and have been living as a tax resident in the same permanent home in Spain for more than three years, then you are exempt from paying Spanish capital gains tax on the property.
- You can also be exempt from paying CGT if you have been a fiscal resident in Spain for three years and reinvest your money from your principal home in another principal home. However, you must continue to live in this new property for the next three years. The property you buy can be in any member EU state, but you must reinvest all the money. If you do not then you will be liable to capital gains tax in Spain on the difference.
- If you haven’t quite made the three-year threshold and there is a compelling reason why you have to sell, the Spanish Tax Authority will take this into account. So, for example, if you have a medical issue that means you can no longer manage to live in a high-rise property, or if you have to move because of work-related reasons, then the Spanish Tax Authority will take this into consideration.
Furthermore, if you are selling a property in another country within the EU and you are a resident in Spain, you must declare the CGT when you make your resident tax declaration in June. This declaration covers your income from the previous year.
How does the tax authority calculate Capital Gains Tax?
Capital gains tax is calculated with the purchase price (as written on the Title Deed) with some extra costs including:
- VAT
- Land Registry fees
- Notary fees
- Transmission tax and legal fees.
This is then deducted from the final sale figure less costs incurred during the sale, including legal fees:
Final sale figure – true purchase price = net profit
Although you can deduct purchasing and selling expenses, you should note that this does not apply to any other debts or mortgages that you have. Furthermore, until January 2015, the Spanish Tax Authority took inflation into account when calculating capital gains tax. However, this is no longer the case. This means that some people are paying significantly more CGT.
What happens if I’ve made improvements to the property?
Aside from “do you pay tax when you sell your house in Spain?”, a frequent question our clients ask is what happens if you have made substantial improvements to your property and it has increased in value. Firstly, it is important to ensure that you have the correct building licences for any changes that you have made. These will also need to have been recorded at the Land Registry. When you register the changes there will be a revaluation of how much the property is worth that should bring it more in line with your selling price. As with most taxes, being aware of what to expect helps you plan accordingly.
More questions you might have
Navigating the taxation system of a foreign country can be an intimidating task – especially if you don’t speak the language. Furthermore, as many people who live in Spain know, Spanish bureaucracy can be particularly challenging. However, if you want to sell your home, Ábaco Advisers is here to help. At Ábaco Advisers, our team of experienced fiscal and taxation experts can help you make sure you follow regulations. For more information, without obligation, don’t hesitate to fill out this form. We can give you the advice you need in the language of your choice.
198 comments
1 May, 2018 9:17 am
My wife and I have been tax
My wife and I have been tax resident in Spain for over three years and have sold our UK property in 2017. We are both over 65 years of age. Are we exempt capital gains tax on the sale of our UK property that was our main home for 22 years before moving to Spain?
2 May, 2018 12:57 pm
Hi Michael
Hi Michael
I'm afraid you won't be exempt as this was not your residential home when you sold it.
5 May, 2018 9:43 am
Will the CGT be the value of
Will the CGT be the value of my house in England when it ceased to be my domicile 10 years ago as opposed to the MUCH lower purchase price when I bought it.
8 May, 2018 12:03 pm
Hi Bernard
Hi Bernard
Capital Gains is based on the purchase value plus official costs less the sale prices less costs and you are taxed on the difference.
6 November, 2018 11:20 am
I am selling my house in the
I am selling my house in the UK for £275000 with a mortgage outstanding of £35000 having bought it in 1996 for £62000, completion will probably be January 2019, we can see that in the UK there is no CGT but as are planning on moving to Spain next year we have been told that we will be liable for CGT there.
We are selling our main residence in the UK and buying our main residence there for around 208000 euros, as we will NOT be resident in Spain when we sell our house, we are moving AFTER it is sold we will not be resident for tax purposes or will we.
Please help
13 November, 2018 9:21 am
Hi David
Hi David
Provided the sale of the property in the UK is done in the year before you come to Spain to live, then you will not be liable for CGT here. So, if you sell in 2018 and do not come to Spain as residents until 2019 there will be no CGT. However, if you sell in 2019 and become residents in Spain in the same year, there will be.
20 November, 2018 10:55 am
Hi. thanks for this info –
Hi. thanks for this info – very helpful
Just to be certain:
– If I sell my house in the UK, the only possible tax liability in Spain is on the capital gain? (it’s not yet certain whe all this will happen so I want to know my maximum liability)
– I can offset verifiable improvement costs against the gain? Is this a case of producing builders’ receipts?
– Am I right in thinking there is also a threshold of about 11,000 that can be set against it?
– I see the rate for non-residents is 19%. What would it be if I were resident and not in anyway exempt from CGT?
Many thanks
2 December, 2018 7:40 pm
Dear Joanna
Dear Joanna
This is quite a complex case and each case such as this must be studied to see if modifications and builders' receipts are acceptable or not. If you are a non-resident of Spain then you do not pay capital gain tax here for the sale of a property in the UK.
30 December, 2018 9:46 am
In the uk cgt is only payable
In the uk cgt is only payable on gains over £11.700, is there a figure that is non taxable in Spain please ?
1 January, 2019 4:47 pm
Dear Martin
Dear Martin
There is no allowance for capital gains tax.
30 December, 2018 9:43 pm
Hi,
Hi,
Bought our UK house 35 years ago for £21,000. Would probably sell now for £180,000.
We rented out the house 3 years ago, moved to Spain and are now Spanish tax residents. How much CG tax would Spain want if we sold now?
Thanks
5 January, 2019 10:59 am
Hi Annmarie
Hi Annmarie
You pay tax on the capital gains made from the difference between the sale price and the purchase price. This is classed as income that is declared on your annual tax declaration. The percentage depends on your tax declaration and the rest of your income.
17 January, 2019 10:29 pm
When calculating cgt on the
When calculating cgt on the sale of your property in Tenerife, can you consider the agents purchase and selling fees ?
Also having replaced all doors and windows, new kitchen, bathroom, and tiles throughout, can you consider these costs when calculating cgt taxes ?
28 January, 2019 2:05 pm
Hi Dave
Hi Dave
The costs for the solicitors, agents' fees etc. can always be deducted provided there are official receipts. You would have to get local advice on other costs and would need official receipts for these too. You can deduct usually for some improvements but not for wear and tear costs.
20 January, 2019 4:55 pm
Hello,
Hello,
My aunt has a second home in spain and lives there a few months of the year but is a tax payer in the uk where she is a resident. She is selling her spanish property and thought she would pay CGT in the uk on the profit but now isnt sure if its actually due in spain? Any advice?
28 January, 2019 2:07 pm
Hi Harriet
Hi Harriet
As the property is situated here you have to pay CGT in Spain and then make a tax declaration in the UK. Under the double taxation treaty the tax paid here can be deducted from any liability in the UK.
5 February, 2019 4:22 pm
If I am resident in Spain,
If I am resident in Spain, and sell a house I have owned in the UK for many years (inc. when it was my personal residence whilst in the UK), I understand that I have to pay some Spanish CGT (even though there is no CGT liability in the UK). But, is the Spanish CGT calculated on the increase on the property from when I became resident in Spain? (i.e. I presume I need a valuation on the date I became resident, rather than basing the gain on the original cost price when I was a UK resident).
13 February, 2019 10:50 am
Hi Steve
Hi Steve
The tax is based on the purchase price plus costs then the sale price less costs and you pay tax on the difference.
26 February, 2019 12:32 pm
Hi Suzanne. Thanks for your
Hi Suzanne. Thanks for your reply. The key part of my query related to the date I became a Spanish Resident. Surely the Spanish gain is solely the element from the value of my property at the point I became a Spanish resident, rather than the original cost where I was a UK resident? In which case, I would need to get a property valuation at the date I left the UK ??
4 March, 2019 12:44 pm
Hi Steve
Hi Steve
Unfortunately, the capital gains is calculated from the date of purchase of the property to the sale. When you became a resident makes no difference.
6 February, 2019 4:08 pm
If a Spanish resident and tax
If a Spanish resident and tax resident for more than 3 years and over 65 and you sell your house to return to uk do you have to purchase another property can you just return to uk with the money from your sale
13 February, 2019 10:53 am
Hi Jacqueline
Hi Jacqueline
If you are a tax resident for more than three years and over 65 and you sell your house when you are still a resident then there is no capital gains tax to pay. However, you must still complete the tax declaration for that year as a resident.
7 February, 2019 3:00 pm
Hi, I am completing on a
Hi, I am completing on a villa in Alicante at the end of June, I am selling my UK house but might not complete untill August, would it be best to wait untill January 2020 to become resident in Spain and just be non resident for the rest of this year and just stay for the 90 days to advoid Capital Gains Tax. Thank you
12 February, 2019 8:11 am
Hi
Hi
Yes, become a resident in 2020.
15 February, 2019 4:10 pm
Hi, We are currently planning
Hi, We are currently planning on selling our family home this year in Ireland and moving to Spain. I saw in one of your earlier comments if we move in the same year that we sell our home we are liable for CGT. However in Ireland If you spend 280 days or more in Ireland over a period of two consecutive tax years, you will be regarded as resident for the second tax year ( which applies to us ). Does this supersede Spanish tax law to leave us with no liability as we will not be deemed tax resident? We are planning on moving in May to enrol our kids in school but if we need to ensure that we are not in the country for more than 183 days than we will have to move in mid July. I appreciate your help on this.
Many Thanks.
22 February, 2019 2:18 pm
Dear Adrian
Dear Adrian
If you sell and move to Spain in the same tax year and are here for 183 days then you have to pay capital gains tax here. It's better to sell in Ireland and not come to Spain until the following year.
18 February, 2019 10:12 am
I don’t understand this very
I don’t understand this very well.
If I am a UK resident and selling my Spanish property for €125,000
Will I pay 19% tax or 3% tax?
How much will I have to pay?
I have not been a Spanish resident.
18 February, 2019 2:11 pm
Hi Viv
Hi Viv
3% is retained by the purchaser and paid to the Tax Office as a deposit for the Capital Gains Tax which for non-residents is 19% of the profit made.
18 March, 2019 1:46 pm
I am a resident in Spain for
I am a resident in Spain for more than a year, and I am selling a small property (Urban Land, no building on it; price is less than 50K Euros)) that I have had for more than 20 years in my country of birth, outside the EU, i.e. overseas; and I am paying taxes there (in my country of birth) for selling it. Do I have to pay a tax here in Spain?
Thanks for your help.
22 March, 2019 8:47 pm
Hi Gans
Hi Gans
Yes, you will have to pay capital gains tax here
25 March, 2019 1:55 pm
If I am resident in Spain and
If I am resident in Spain and sell a property back in UK that has no capital gain is there any tax to pay at all?
31 March, 2019 3:57 pm
The property has to be
The property has to be declared and if there is no capital gain then there is no tax to pay.
28 April, 2019 10:39 am
I sold my house in the uk
I sold my house in the uk before moving to spain intending to become resident but because of not being able to settle only stayed in our spanish villa for less than 6 months at a time over a 2 year period using it as a holiday home. When returning to the uk residing with my daughter. We have now sold in spain intending to re-invest the proceeds for our main residence in the uk. Are we liable for CGT.
30 April, 2019 11:58 am
Hi David
Hi David
As non-residents in Spain you will have to pay CGT here but you will also, as UK tax residents, have to declare the sale in the UK under the double taxation treaty and any tax paid here is deducted there
4 May, 2019 2:47 pm
Resident in Spain, with
Resident in Spain, with property here.
Property in UK that one day I may wish to sell.
Am I right in thinking the way to reduce the CGT would be to return, live in the property one year and then sell it there as first resident. Is that right?
10 May, 2019 12:33 pm
Hi Chris
Hi Chris
No. For it to be your residential home you would have had to have lived in it for three years prior to the sale. You would not be residents in Spain as the property is in the UK.
8 May, 2019 1:04 pm
Hello . I’ve received a
Hello . I’ve received a received a letter from HMRC Debt Collection agency relating to unpaid CGT for a house I sold in Spain in 2011. I am shocked by this because I have never received any form of notice from the Spanish authorities. I was 67 when I sold the Spanish house and then bought my home in the UK several months later.
Is there not a time limit to claim for CGT claims ? Any other information, I’ll be glad to provide.Thanks in adavance. Carl
20 May, 2019 8:12 pm
Hi Carl
Hi Carl
As a file has been opened the time line of four years is extended. If sold, this is a complex situation but you should have either presented the Resident Tax Declaration of 2011 to pay tax or claim exemption or, if non-resident, presented the 210H.
20 May, 2019 10:43 am
I purchased property in Spain
I purchased property in Spain for 186,000 in 2009/10 I sold it in January 2018 for 115,000 and still have not received at tax refund. Any idea how much this will be and when may I be likely to receive it.
24 May, 2019 1:32 pm
Hi Lynn
Hi Lynn
You have to make the application for the refund of the 3% held so the refund would be €3,450 and can take anything from up to 12 months from the date of the presentation of the 210H form for the refund to be made.
27 May, 2019 2:38 pm
I bought my flat in Madrid in
I bought my flat in Madrid in July 2015 when I was resident there. I sold it in January this year and was told I had two years to pay the CGT on the property. As I am no longer resident there (I have since returned to the UK) I don’t have to do my declaración de la renta as usual but I’d like to know if I do have two years to pay it but also, if I buy a property in the UK, while we’re still a member of the EU, do I still have to pay it? And if so, who do I pay it to?
1 June, 2019 4:13 pm
Hi Ursula
Hi Ursula
As a non-resident the capital gains tax declaration form 210H should be presented three months after the presentation of the 3% retention and the capital gains paid. If not, then there is a fine.
2 June, 2019 3:45 pm
I am resident in spain and
I am resident in spain and have a property in the Uk that I bought 25 years ago so the gain on it is huge (about 400k). My principal home is now in spain. i want to raise 100k for deposits on property for my 2 children and one option is selling the UK property. I know that if I sell the UK property now I would have to pay CGT in the UK but as I am resident in spain, according to the new tax laws, I believe the UK CGT would be based on the value of the property in April 2015 which would mean CGT on about 60k. But with the dual tax laws am I right in thinking that the CGT due in Spain would be on the purchase price minus the sales price which would wipe out any benefit of the new CGT rules in the UK ie I’d still have to pay CGT on a profit of 400k or so but to spain instead?
11 June, 2019 8:37 pm
Hi
Hi
You have to declare in the UK under British Law and in Spain under Spanish regulations. This will be the value of purchase plus costs, value of sale less costs and then an allowance for the time if purchased before 1994. Then you deduct any tax paid in the UK under the double taxation treaty.
9 June, 2019 10:08 am
We have property in the UK
We have property in the UK and are resident in spain. If we move back to the UK, for how long after our return to the UK are sales of UK property affected by spanish capital gains please? Ie, at which point can we sell a property and not be liable to declare the sale in spain /pay CGT in the UK only/not have to consider dual tax implications?
14 June, 2019 8:47 pm
Hi Hilly
Hi Hilly
It would have to be at least one full tax year.
20 June, 2019 6:53 am
We have lived in Spain for 12
We have lived in Spain for 12 months and now considering selling our UK property which we rent out. We only purchased the property in 2012 and not sure if CGT is payable because we have only owned the property since that date.
24 June, 2019 6:11 am
Hi Susan
Hi Susan
I'm afraid capital gains tax is still payable.
21 June, 2019 9:32 am
If our property in England
If our property in England was purchased in 2012 and we decide to sell it are we liable for CGT in Spain as someone has told us we haven’t owned it long enough to pay CGT on it?
24 June, 2019 6:15 am
Hi Susan
Hi Susan
As mentioned above, you are still required to pay CGT
15 July, 2019 12:31 pm
Hi, my wife and I sold our
Hi, my wife and I sold our apartment in Spain in March 2018. We are non residents. We have not yet received the 3% retention back 16 months later. Our solicitor has chased the tax office but to no avail. Is the tax office in Spain accountable to anyone? Is there a phone number or email address available for non Spanish speakers to raise queries? Any advice would be gratefully received.
Thank you
18 July, 2019 8:55 pm
Hi David
Hi David
It can take a long time for the Tax Office to process this. There is no number for non-Spanish speakers. The telephone number for non-residents in Madrid is 91 7575775 but for earlier presentations you will have to go in person to the corresponding office in the capital of the province and arrange an appointment as no information is given by phone.
15 July, 2019 3:48 pm
We are UK residents who have
We are UK residents who have just sold our primary and only UK property. We already own a small house in Spain which we plan to keep. We now want to buy a 2nd property in Spain.
Our aim is to move to spain and use the new property as our primary residence and become residents. Have I got it right that it would be best for us to wait until 2020 before becoming residents in Spain? Thanks for any advice
24 July, 2019 6:07 am
Hi Jay
Hi Jay
If you sold in 2019 in the UK you would need to wait and come to Spain in 2020 or you might have to pay CGT.
22 July, 2019 2:06 pm
Who tells us how much capital
Who tells us how much capital gains tax we need to pay when we sell our garage space in Spain and how is it collected. We are non residents
25 July, 2019 2:55 pm
Capital Gains Tax is due on
Capital Gains Tax is due on the profit made on all property sales in Spain. In the case of all Non-Residents, 3% of the current sales price is retained by the lawyer acting on behalf of the buyer and paid to the Hacienda Pública (Tax Office) in the name of the seller on Tax Form 211. This is a legal requirement when non-residents sell property. The non-resident seller therefore receives 97% of the agreed price until any tax liabilities (including Capital Gains Tax) are settled, after which the seller will either get a refund or have to pay any outstanding tax balance.
For non-residents, the capital gains tax rate is 19% of the profit made on the sale.
To calculate this profit you need firstly to ascertain your original purchase price. We do this by adding to the purchase price as written on your Title Deed the costs which you incurred in the purchase (VAT, Land Registry fees, Notary fees, Transmission Tax, Legal fees etc). This gives a true purchase cost.
We then take your current selling price and deduct from it the costs incurred in the sale (legal fees etc), thereby reducing the final sale price.
Now you have your original purchase price and your final sale figure, so we can work out your net profit and calculate your Capital Gains Tax liability.
The 3% retained by the Tax Office will either be more than or less than the sum of tax to be paid. In either case, Form 210 H is submitted to the Tax Office, either claiming the outstanding balance or enclosing payment for the sum owed.
28 July, 2019 2:18 pm
Hi there
Hi there
3. CGT questions for you:
1. I own a UK property that has doubled in value since I bought it back in 2006. Am I correct in thinking that the calculation for Spanish CGT = sale price – (original price+improvements+outstanding mortgage)? The outstanding mortgage is important to know that this is factored in as I have quite a bit left to pay off that will be paid off with the sale albeit that there will still be CGT to pay due to increase.
2. I am currently renting here in Spain and looking to buy a house here. Am I right in thinking that I can invest the proceeds of the uk house in the Spanish house and thus avoid/minimise CGT? Can the UK continue to be called my prime residence even though I’m renting temporarily here in Spain while looking to buy a house?
3. Further to point 2, can I buy here in Spain first and then sell later the UK property and still benefit from this relief? I’d need to take out a temporary mortgage here in Spain to part fund the purchase and then use the proceeds from the UK sake to pay it off. I have read there is a period of 2 years before/after sale?.
Many thanks – congrats on website and forum – very useful and insightful
3 August, 2019 10:02 pm
Hi
Hi
To answer your questions:
1. No, the paying off of the mortgage will not influence the CGT
2. This is a complex issue. In theory you would have to present the tax declaration first to pay the CGT then present a request to take into account that the property sold was Residence Habitual. However, you would normally have to be a tax resident for 3 years before any benefits can be obtained.
3. as in point two, if you sell later and live in the new property , the property there is not your habitual home
31 July, 2019 5:55 am
Hi
Hi
We are saleing our Spainish property that we have own for approximately 1year . As we understand it there will be cgt on any profit at the rate of 19 per cent. Is the the only only tax payable ?.
3 August, 2019 10:04 pm
Hi David
Hi David
No. There will also be Plus Valia to pay.
2 August, 2019 5:41 pm
We are in the process of
We are in the process of selling our only house (which is in the uk). Value circa £400,000. We paid £175,000 but did spend a lot on refurbishment many years ago. When it sells I plan on taking early retirement and immediately moving to Spain. I am 51 and my wife is 68. The cgt that seems liable will completely change these plans. Are there no easy solutions?
7 August, 2019 3:41 pm
Hi Ian
Hi Ian
The only way to avoid capital gains tax is to sell the property in one year and not come to Spain until the following year.
5 August, 2019 5:49 pm
Hi,
Hi,
We bought an apartment in Spain for 225,000€ back in 2004/5. If I decided to sell it know it would only fetch around 150,000€, and I still owe around 60,000€ on a Spanish mortgage.
Since we purchased, exchange rates plummeted as well as the property market.
Would I be liable for any tax?
8 August, 2019 7:12 pm
Hi Colin
Hi Colin
Capital Gains Tax is due on the profit made on all property sales in Spain. In the case of all Non-Residents, 3% of the current sales price is retained by the lawyer acting on behalf of the buyer and paid to the Hacienda Pública (Tax Office) in the name of the seller on Tax Form 211.
This is a legal requirement when Non-Residents sell property. The Non-Resident seller therefore receives 97% of the agreed price until any tax liabilities (including Capital Gains Tax) are settled, after which the seller will either get a refund or have to pay any outstanding tax balance.
For Non-Residents, the Capital Gains Tax rate is 19% of the profit made on the sale. To calculate this profit we need firstly to ascertain your original purchase price. We do this by
adding to the purchase price as written on your Title Deed the costs which you incurred in the purchase (VAT, Land Registry fees, Notary fees, Transmission Tax, Legal fees etc). This gives us a true purchase cost.
We then take your current selling price and deduct from it the costs incurred in the sale (legal fees etc), thereby reducing the final sale price. We can also deduct certain costs of major structural alterations you have made to the property – but only if you can produce the official receipts for the materials and/or work involved (not applicable if you paid by cash and have no VAT receipt).
Now we have your original purchase price and your final sale figure, so we can work out your net profit and calculate your Capital Gains Tax liability.
The 3% retained by the Tax Office will either be more than or less than the sum of tax to be paid. In either case, Form 210 H is submitted to the Tax Office, either claiming the outstanding balance or enclosing payment for the sum owed.
11 August, 2019 9:55 am
I was resident in Spain. I
I was resident in Spain. I sold my house in Spain in November 2018, I moved back to the UK. What is the time scale to reinvest the gain in a new property to avoid CGT?
Do I have to complete within that time, or can I place a deposit on a new property?
11 November, 2019 4:02 pm
Hi David,
The time scale for reinvestment is normally 2 years, this would have been declared in the 2018 Tax delcaration where you would have promised the amount to be reinvested.
Best regards,
Ábaco Advisers
3 October, 2019 9:08 pm
I am a non resident with a property in Spain I have just sold my house in the UK and would like to move to Spain next month will i have to pay capital gains to spain even if i wasn’t a resident when i sold it
7 October, 2019 11:25 am
No, in this case you will not need to do so.
Kind regards,
Ábaco Advisers
10 October, 2019 9:36 am
I have a question regarding Property Capital Gains Tax: Can a Non-Resident profit from a roll-over relief if the sale proceeds are re-invested in another property in another part of Spain?
10 October, 2019 11:11 am
Hello,
No, unfortunately this is only for residents in Spain that sell their main property and where they have lived permanently at least 3 years.
Kind regards,
Ábaco Advisers
14 October, 2019 12:06 pm
Earlier this year I purchased a one bedroom flat.
Following our purchase I have conducted an official MINOR REFORM with permission given by the council and the appropriate tax paid.
At this point I am undecided whether to sell or to rent. I would like to understand the tax position in the event that I decide to sell the property.
Am I correct in assuming the following when I am calculating my Spanish tax and capital gains tax (CGT) obligations:
1. The total cost of purchase can include transmission tax, lawyer, notary and registration fees. Is this correct?
2. An official licence was obtained for a minor reform and taxes paid. No structural work was conducted in the reform process. I understand that there are no allowances that relate to any of the money spent on the reforms when calculating my CGT obligations. The reforms included new kitchen and appliances. Is this correct?
3. Are there any other deductions allowable such as community fees, electricity, local council taxes, when calculating CGT?
4. I understand that there is a 3% withholding tax which can be recovered after a certain period. Is this correct?
5. I understand that the correct rate of CGT in Spain is 19%. Is this correct?
6. Will there be another tax applied to the sale called Plus Valia and is this a tax that I will pay? If so how is it calculated?
7. I understand that all selling fees and lawyers fees can be included in the final CGT tax computation.
8. Are there any other taxes and or items that I have omitted?
Lots of questions. Your advice would be appreciated.
17 October, 2019 2:35 pm
Hello Tim,
Will try to answer the best as possible below to your queries:
1. Yes, this is correct.
2. The answer is correct there are no allowance for minor works carried out on the property, had it been an New Building and extension of the property with a new Title Deed then this would have been allowed.
3. No, unfortunately no.
4. Yes, you may recover it if you do not have a CGT or if the CGT is below the 3% retained and then you could recover the difference.
5. 19% is correct as non-resident.
6. Yes, plusvalía is a tax paid when selling and is calculated on the rateable value of property and the number of years that have passed since the property last changed hands.
7. Selling feed such as the estate agents commission can be deducted.
8. We believe you included everything in your list.
With kind regards,
Ábaco Advisers
22 October, 2019 3:04 am
F.A.O. Suzanne O’Connell
A few queries from an old sea salt. Will gladly reimburse if required for your time and expertise !
I have been Non-Resident in Spain since mid 2000. Presently I work offshore in the UK Oil & Gas Sector so am officially a UK Resident for Taxation purposes. I return to Spain during my field-breaks. Therefore, I am in the UK for approx 210 days out of 365 days. Am I still legally a Non-Resident with around 150 days per year living in
Spain ? ( I have no UK assets / property )
Since August 2006, I have lived in Granada and intend to retire there in 2023 when I reach 66 years. When I retire, I believe it will be mandatory to take full residency as my presence in Spain will become permanent. Please can you confirm ?
My property in Granada was purchased for circa 265,000.00 Euros in mid 2006. There is no outstanding mortgage
Should I sell my house after 4 to 6 years after retiring and have taken full residency status, I believe I might be exempt from Capital Gains. Please can you clarify if my reasoning is correct or otherwise ?
If any profit from the sale of the Granada property was transferred back to the UK, would I be subject to any UK foreign earnings taxes ( the money would probably be invested into a retirement apartment ) ?
Regards
Ken Cook
23 October, 2019 4:55 pm
Hello Ken,
As answer to your query you are still non-resident in Spain.
We do not know if there will be change of laws when you intend to retire in 2023, but according to todays situation you will have to become resident in Spain if you intend to live permanently in Spain.
According to todays tax situation if you are over the age of 65 years old, you are pensioner, have been resident in Spain for over three years and the property you are selling has been your main residence you willl be exempt of Capital Gains Tax.
If you are resident in Spain you should not be required to pay taxes back in the UK.
Kind regards,
Ábaco Advisers
22 October, 2019 11:20 pm
Dear Sirs As non residents we built a house in spain on ground we already owned. property built 2005/6 approx build cost 230,000E , property registered with notary early 2015 following some repair works, with a value of 270,000E all relevant papers regarding build provided to the notary at that time.
Property sold end 2016 for 280,000Euros. 3% retention for CGT paid to Agencia Tributaria at time of sale.
All paperwork of no value to the purchaser, destroyed in Jan 2018. 2018 Agencia calculated a CGT bill based on original purchase price of the land (some 30,000Euros in 2001) . Our Gestoria argued that the property was sold with a house, and despite us no longer having the builders receipts the value of the build was approx 230E plus costs.
Agencia Tributaria has reassessed the CGT now due at about 41,000euros and we are in the process of appealing. We have had to pay 5,162thousand euros in April 2019 in order to defer payment and appeal and further payments of some 2,788thousand euros per month for the next 12 months.
The Agencia has made no ruling as yet, I gather it has 6mths to respond. This means shortly if we receive no ruling, we will have to appeal to a Tribunal to overrule the Agencia and have our payments returned. I am very unwilling to continue to make payments as the amount demanded is patently incorrect.
If the Tribunal does not overrule the Agencia, we will not receive any repayments either.
Please can you advise if this is legal that the agencia can invent this CGT due when we provided all the paperwork to the Notary at the time of registration of the property.
This seems to be a false calculation we are being asked to pay..
24 October, 2019 7:57 am
Dear Jennifer,
It is complicated to give you detailed information without seeing the documentation of the property. In these cases it is vital that you have all documentation and paperwork in place and in order, without it is very difficult to claim anything at all from the Agencia Tributaria. Also the registration of the building should have been done before 2015 to avoid any possible issues.
We assume you legal team is doing all that is possible with the tools and paperwork they have on the property.
Sorry we can not really be of any further assistance.
Kind regards,
Ábaco Advisers
25 October, 2019 10:34 am
Hi, my partner & I split about 4yrs ago, we live & had a mortgage in tenerife, I sold the property & the lawyer kept back the percentage for taxes @ Notre & all outstanding Bill’s were paid before completion, I moved back to uk & my ex has stayed & worked in tenerife, she call me & said she received a letter today demanding €11,000 for tax on property! But this was all taken care of when property was sold, what she do?
25 October, 2019 10:59 am
Hello,
Thanks for your message. We would need to see all paperwork, taxes paid, and letter of the Tax Authority to be able to asses in this matter.
If you wish to send us all documentation on your case you can do so by emailing us at info@abacoadvisers.com
Looking forward to hearing from you.
Kind regards,
Ábaco Advisers
6 November, 2019 3:16 pm
Dear Miriam .
We purchased a new build apartment in Mallorca for 404600 euros plus the 10 % tax for new builds this was in 2017 so the total paid with tax 445,060 euros
We have just accepted a offer for 510,000 euros
Can I ask is the capital gains tax paid on the difference between 404k euro figure or the 445 k figure .
No one seems to be able to confirm . Is the gain on the 105,400 euros or 64940 euros ?
Many thanks in advance
IAN
7 November, 2019 9:42 am
Dear Ian,
For non-residents, the capital gains tax rate is 19% of the profit made on the sale.
To calculate this profit we must work out the true purchase price:
• Purchase price (as written on the Title Deed) + costs incurred in the purchase
The purchase costs that will be taken into account include the VAT, Land Registry fees, Notary fees,
Transmission Tax and Legal fees.
We then take your current selling price and deduct from it the costs incurred in the sale (legal fees etc).
We can also deduct certain costs of major structural alterations you have made to the property – but only
if you can produce the official receipts for the materials and/or work involved. We can not do this if you
paid by cash and have no VAT receipt.
These calculations will leave us with a final sale figure.
• Final sale figure – true purchase price = net profit
Hope this information can be of help.
Kind regards,
Ábaco Advisers
14 November, 2019 7:36 pm
Hi,
We sold our apartment in Spain as non residents and we can’t do our Capital Gains Tax because our accountant says that we need the 211 form with the 3% retention from the buyer in order to do this but we can’t reach him. What is the solution in this case, if the seller can’t get the tax declaration from the buyer with the 3 % retention.
Thank you!
15 November, 2019 4:15 pm
Hi,
Our recommendation is to have your solicitor claim the 211 to the buyer and their representative.
Kind regards,
Ábaco Advisers
17 December, 2019 5:32 pm
My Name is Anne Marie Frisby I have an account with you
I am thinking of selling my property as I am now a Senior Citizen do I still pay Property tax
Regards
Anne Marie Frisby
17 December, 2019 5:54 pm
Hi Anne,
Yes unfortunately yes, you will have to pay property tax.
Should you need assistance please contact our colleague Jessica at the following email jsp@abacoadvisers.com
With kind regards,
Ábaco Advisers
31 December, 2019 5:19 pm
My husband and I bought an apartment in Spain in 2006 for 210,000 euros. We want to sell it but it but we will sell it at lost. According to the market value it is worth 185,000 euros. We are non-residents. We have finished paying for the mortgage. We are over 65 years old. Do we have to pay CGT and Plusvalia in Spain? How much? Do we have to pay Income tax in the UK? Even though we will not make any profits.
2 January, 2020 12:51 pm
Hi,
If you can prove these figures you will not need to pay CGT, but please bear in mind that when selling your property as non-resident 3 % of the sale price will be retained by the buyer and paid to the hacienda pública (tax office) in the name of the seller on tax form 211. This is a legal requirement when non-residents sell property.
Regarding the plusvalía you will most certainly be responsible to pay this tax to the Local Town Hall.
Should you need any help in the process please contact us at info@abacoadvisers.com
With kind regards,
Ábaco Advisers
10 January, 2020 12:16 am
We are building a villa at a cost of €650000 in the province of Alicante.
It is our intention to reside there for more than 26 weeks of the year
I have 13 properties in the uk (all in my sole name) that I rent out.
If we become resident in Spain what taxes will I pay and how much
Thank you
H
13 January, 2020 2:07 pm
Hi Howard,
Without all the figures it is very complicated to goive a good answer to this query, you would have to be in Spain for less than 26 weeks as this is exactly 50% of the year which could bring you over the 183 days allowed. If you are residents you would pay Tax on your world wide income including the proeprties, there could also be Wealth Tax on top of income Tax. The rent for the properties has to be declared in the UK as well as in Spain, Tax paid on the rental income is deducted from the Tax to pay here under the double Taxation treaty.
Should you have any further queries please do not hesitate to contact us at info@abacoadvisers.com
With kind regards,
Ábaco Advisers
10 January, 2020 4:23 pm
Hi. I am a non resident but have owned a small town house in a village since 2004. Although i payed €47.000 if i could if a buyer it is now proberly only worth around €5.000. Would i have to pay any tax as it will be sold for a loss?
Thanks
13 January, 2020 2:03 pm
Hi Julie,
If sold for a loss for a Non Resident then there is the 3% retention which can be claimed back if there is no CGT to pay.
With best regards,
Ábaco Advisers
10 January, 2020 4:40 pm
We currently have an offer on our home in Spain. I am 69 years old and my wife is 58. We have been residents in Spain for the past 8 years and permanent residents for the past 1 year. Will my wife be liable for CGT on her half of any profit made? This is our only residence, we do not own any other property.
13 January, 2020 2:02 pm
Hi Michael,
Your wife would have to pay Capital gains Tax if there was a Gain as she is not 65.
Thank you so much.
Kind regards,
Ábaco Advisers
10 January, 2020 6:31 pm
Hi, if we sell our spanish home privately without an estate agent, who pays the solicitors fees, the seller or the buyer
13 January, 2020 1:31 pm
Hi Janice,
The buyer will pay for his solicitor and the seller for his own solicitor, if you have the same solicitor in the process if depends on the agreement you reach.
With kind regards,
Ábaco Advisers
12 January, 2020 6:31 pm
Dear Sirs,
I would appreciate your advice on the following query.
If a property is jointly owned by a resident and a non-resident, what effect will this have on the 3% capital gains tax retention. If you have any authority for your answer, that would be greatly appreciated.
Kind regards,
13 January, 2020 1:30 pm
Hi Kirsten,
Thank you for contactin us.
In this case only 3% will be retained of the percentage of ownership of the non-resident owner. For example, is you sell a property for 100.000 € and you are both 50 % owners, only 3% of the 50.000 € will be retained for the non-resident owner, in this case the amount of 1.500 € will be retained.
With kind regards,
Ábaco Advisers
24 January, 2020 8:36 am
Hi, I have Spanish recidencia and have had for 15 years, but am British. Am I correct that if you sell your property in Spain but then fully reinvest any profit in further more properties in Spain you do not pay the capital gains tax, because you will be paying the tax on the new property or properties? For example if a house is sold with a profit of 250,000€ after the mortgage and costs are paid and I then use that to buy 2 smaller properties at 125,000 each. Because I am paying the tax on 2 new property purchases, would I still have to pay the Capital gains on the profit from the original sale?
I was told if profit is reinvested in to the Spanish property market within a 2 year period you do not pay the tax on profit?
Thanks in advance!
29 January, 2020 2:50 pm
Hi Andy,
It is correct that if you sell and reinvest any profit you will avoid the capital gains tax, but if you buy two properties you will have to pay capital gains tax as you can not have two different main residences.
With kind regards,
Ábaco Advisers
26 January, 2020 6:13 pm
Hi, we have been living in France for fifteen years, and the plan is to sell our home and enable early retirement by living in rented accomodation in Spain. Trouble is, we have heard that we may be subject to capital gains tax by the Spanish authorities, even though it is our principle home ?
29 January, 2020 3:04 pm
Hi Richard,
Yes this would be the case, it is always advisable to sell the the year prior to coming to Spain to be a Resident.
Kind regards,
Ábaco Advisers
31 January, 2020 12:41 am
Please advise, My Father in law is 95, and has been a Spanish resident for 29 years and is bequeathing his property, 50/50 the family home, a Villa in the Valencia region, valued at approx 270,000E to my wife living here in Spain and her brother a resident in the uk on his death. Will my wife and her brother be liable for any Taxes or Capital Gains Tax on the property before they become the legal owners of it ?If so what amounts are they
When they become the legal owners of it , they both aim to sell it asap and she and I will return to the UK, what tax liabilities will there be when the Villa is sold
Thank your help
Geoff Cherry
4 March, 2020 5:14 pm
Hi,
First they will inherit, they will become owners and will pay Inheritance Tax. The reduction in the Valencia Region is 100.000 € per child, the Inheritance Tax is calculated then on the rest of the value.
In the case that they inherit and sell the property they will have to pay taxes on the sale, admin fees, plusvalía tax, etc.
Please do not hesitate to contact us should you have any further queries.
Kind regards,
Ábaco Advisers
31 January, 2020 12:43 pm
Have the Spanish government legislated on the Plusvalia tax yet
5 February, 2020 2:04 pm
Hi David,
Still no clear ruling on the Plusvalía tax.
With kind regards,
Ábaco Advisers
9 February, 2020 12:17 pm
I bought land in Spain in 2002 with my Husband who died 6 years ago. We were both OAP s when we moved here and my husband was disabled.. We were both Spanish residents but have not paid tax or been asked to do as we only had some money from our British sale .We have always paid British Tax . Cash price for the land was 40,000 euros. As I am now disabled and not able to keep the property would like to return to Britain before Britain is totally out of the EU. We built up a small casita, pool and a summer house and kept bills to prove this. We spent ( with the land `175,000 euros. ) As I am 80 years old this year. I MUST RETURN TO BRITAIN I have asked how much I could expect to obtain and the reply was 170,00 euros. which is less than we have paid out. Thank you for your help.
10 February, 2020 4:56 pm
Hello,
We are sorry to hear about your situation.
Should you request any assistance from us please call us at 0034 966 703 748 or email us at info@abacoadvisers.com
Kind regards,
Ábaco Advisers
11 February, 2020 9:23 pm
Hi I have been sent this regarding being able to reduce the selling price of your property by taking away the balance of the mortgage when you sell.
The question of the mortgage may be covered by this on the AEAT web site:
‘Cuando para adquirir la vivienda habitual transmitida el contribuyente hubiera utilizado financiación ajena, se considerará como importe total obtenido en la transmisión, el valor de transmisión, en los términos previstos en la Ley del Impuesto, menos el principal del préstamo pendiente de amortizar.’
Which more or less states ‘When third party finance was used to purchase the property the sale value will be calculated minus the amount of the outstanding balance of the mortgage.’ It certainly does not say that you have to reinvest the whole amount in order to qualify for the relief.
So it’s saying mortgage can be taken off the selling price to reduce the CGT
4 March, 2020 5:23 pm
Hi,
In order to be able to obtain relief when selling you residential home to purchase another you must have owned the property and living in the house for over three years as a Tax Resident and be reinvesting the full amount in the new property. If you do not reinvest the full amount then you can only dedduct a percentage.
With kind regards,
Ábaco Advisers
18 February, 2020 5:46 pm
If I pay my taxes in UK at Source am I liable to pay CBT when sailing my house in Spain
18 February, 2020 6:09 pm
Hi Angela,
Even if you sell your property as non-resident in Spain you will be liable to pay CGT in Spain if the property is located in Spain.
Kind regards,
Ábaco Advisers
4 March, 2020 1:39 pm
Hi,
I have received a gift from my parents of a property in Spain. All taxes are paid there. However, is there anything I would need to declare being a resident myself in the UK?
Thanks in advance.
4 March, 2020 4:29 pm
Hi Alejandro,
No, you will not need to declare it being a resident in the UK.
You will just need to pay your yearly property taxes as non-resident in Spain for the property you have received.
Kind regards,
Ábaco Advisers
14 March, 2020 3:28 am
I am a non resident and have recently sold my property and my lawyer does not have my 211 form (3% retention). Where can i get a copy.
16 March, 2020 5:22 pm
Hi Nadine,
You may check at the notary you signed the sale or with the buyers.
Kind regards,
Ábaco Advisers
31 March, 2020 3:45 pm
Hi, If we sell our house in Spain and pay the due Taxation etc, will we have to pay some Tax again to England HMRC! for the same sale.
Thanking you.
1 April, 2020 10:57 am
Hi Roy,
In the case the Tax has to be declared here on the 210H but also under the Double Taxation treaty in their own country deducting any Tax paid here from the Tax to pay there.
Kind regards,
Ábaco Advisers
2 May, 2020 5:22 pm
When I sell the Spanish property and pay CGT Will I pay more tax when I bring the money to the UK
4 May, 2020 8:33 am
Hi Jeff,
You will have to declare the sale in the UK and the Tax paid here is deducted from the liability you may have in the UK under the double Taxation treaty.
Best regards,
Ábaco Advisers
7 May, 2020 12:10 pm
Hi Oscar,
I am considering becoming a Spanish resident before the end of the year. I own a small apartment in the UK which I will keep to use when I travel back to visit. Can you tell me if I will have to declare it and pay any taxes on it each year? It is worth around £200,000 at the moment (I paid £150,000 and still owe the same as it is on an interest only mortgage, if that is relevant, although I do not plan on selling it) Many thanks
8 May, 2020 8:49 am
Hello Craig,
As you have what would in theory be a holiday home in the UK this would be treated the same as owning a second property in Spain and you would pay some Tax based on 2% of half of the purchase price in your annual income Tax declaration here.
With kind regards,
Ábaco Advisers
17 May, 2020 11:47 am
I am a non-resident property owner,in Spain,i am 67.Do I have to pay Capital Gains Tax,if I sell this property?
17 May, 2020 8:49 pm
Hi Joe,
If you sell your property as a non-resident in Spain and you make a profit on the sale, yes you will have to pay Capital Gains Tax.
Kind regards,
Ábaco Advisers
28 May, 2020 9:00 pm
Looking too reclaim 3%tax as no profit on sale – sold Feb 2019 and were advised apply refund this tax year. Are we too late? Thanks
29 May, 2020 8:08 am
Hi Julie,
The Law stated that this application should be presented within 3 months of the sale, but can be done up to 4 years later but there will be a fine imposed for late presentation. On occasions if a Resident has sold and the 3% was retained in error then this is declared in the annual Tax Declaration for that year, which would be the following year.
If you wish assistance with this matter please do not hesitate to contact us at info@abacoadvisers.com
With kind regards,
Ábaco Advisers
1 June, 2020 11:44 am
Hi,
I have been a resident of Spain for the last 11 years and owned an apartment for the last 6 years. If I sell it and move back to the UK and buy a home there will I still have to pay CGT? If yes will I pay it straight away or next year?
Is Brexit likely to effect this?
Regards,
Justin
1 June, 2020 12:18 pm
Hi Justin,
If over the age of 65 been a Tax resident here in Spain for more that 3 years and sells prior to moving back to UK then no Capital Gains tax will need to be paid. If there has been a capital gains and you do not meet the requirements of exemption or reinvestment then the tax is paid in the Resident Tax declaration due the following year, so sold this year then declare in 2021 for the Tax year 2020.
If Brexit likely to affect this is uncertain at this point.
Hope this information is useful.
Kind regards,
Ábaco Advisers
13 June, 2020 2:33 pm
We are looking to sell our house in the UK and move into a flat that we also own and use the money from this to buy a holiday home in Spain.
Would we come under any further tax implications other than the normal UK one on this sale.
Then if in the future we sold the house in Spain what would be the taxation implications in both Spain and the UK
15 June, 2020 9:00 pm
Hi Philippa,
You should sell the property in the UK the year before moving to Spain to avoid being taxed of a possible Capital Gains Tax here in Spain.
The other house in the UK will be taxed in Spain as a second residence when living here in Spain.
If you sell your property in Spain the taxation will depend of the current situation and time of the sale.
With kind regards,
Ábaco Advisers
17 June, 2020 11:04 pm
Hello.
We are UK citizens now tax resident in Spain. We have sold an ex-rental property in the UK and paid all CGT to the UK Tax office in this current tax year.
We will be declaring this profit in our next Spanish tax return but want to use some of the money earned to pay off a further UK mortgage on another rented property.
Will this re-investment of the profit earned , offset any of the CGT that we will be declaring on our next tax return here in Spain?
(ie; £50k earned as CG on the property sale and a re-investment of £30k to pay off a UK mortgage.)
Thank you
TR
18 June, 2020 8:00 pm
Hi Trevor,
Unfortunately no, sorry for the inconvenience.
With kind regards,
Ábaco Advisers
18 June, 2020 2:39 am
Hi your article is very informative. I have a question please hope you can help.
I am a non resident. I am currently in the process of buying an apartment. My current house is on the market for sale. I will have purchased the new one before the sale of my current home.
When my house sells can I retrospectively reclaim the Capital Gains Tax I will have paid as the apartment will be my main residence?
Looking forward to your reply.
Kind regards
Imelda
18 June, 2020 7:59 pm
Hi Imelda,
As a Non Resident it is not possible to claim this back as the house sold was not your main residence to three full tax years as a resident. Sorry for the inconvenience.
With kind regards,
Ábaco Advisers
23 June, 2020 4:42 pm
Hello.
You mention that if you are a resident CGT is charged in relation to your annual income! Is this a new way of calculating CGT? If so, is their some kind of income scale?
Thanks in advance.
23 June, 2020 10:42 pm
Hi Sebastian,
Sorry, not sure we understand what you are referring to exactly, you are free to contact us at op@abacoadvisers.com should you want to clarify any point in the article.
With kind regards,
Ábaco Advisers
21 July, 2020 1:21 am
Hi,
Dec 2015 : Sold a house in UK – no CGT paid in UK as it was our primary residence and we were UK residents with no connection to Spain.
Oct 2016 : Moved to spain for work (we were told, for 2016 we would be non resident status in spain)
May 2017 : Bought an apartment in Spain and it has been our Primary residence since then
(we transferred half the money from UK sale in 2015 and all of it went in as deposit for spanish mortgage plus buying costs)
Aug 2020: We are looking into getting a second property (and moving into it as our primary residence – renting out first property)
Can we transfer the remaining half of UK sale from 2015 and invest it towards deposit on second mortgage?
(we keep reading about a time limit of 2 yrs – but this shouldn´t apply to us as we had this money even before moving to Spain)
Are there CGT or other tax implications here ?
Thank you for your time in advance.
23 July, 2020 9:20 pm
Hi Harry,
As the property in the United Kingdom was sold prior to being a Tax resident here in 2017 the Capital from the sale can be used for what ever purpose and has no Capital Gains Implications here in Spain as basically you are using your own Capital to buy another property.
Please do not hesitate to contact us should you have any further queries.
With kind regards,
Ábaco Advisers
21 July, 2020 10:23 pm
We have a house in the U.K. that we are intending to retain as our principal residence and live in it for up to six months a year until we retire completely at 65. . But we are also intending to establish Spanish residency this year and have a flat in Spain where we will be the other six months. If we sell our U.K. family home after we are 65 would this be subject to Spanish CGT?
23 July, 2020 9:19 pm
Hi Caroline,
In this case as you are not coming to Spain to live as permanent Residents till you are 65 you would not apply for Resident Status whilst going back and forward to have your main residence there, this is not compatiable with Residence Status here in Spain. If the property is then sold once you are a Resident here it will be liable for Capital Gains Tax.
Applying for Resident Status here just to avoid the new regulations once Britain has left Europe is not correct and can lead to serious Tax consequences and Double Taxation.
Please do not hesitate to contact us should you have any further queries.
With kind regards,
Ábaco Advisers
1 August, 2020 9:19 am
My wife and I are in our eighties and have lived in Spain permanently for 19 wonderful years. My wife now has dementia so we now have to sell our only property in Spain.
Our solicitor says we may have to pay taxes on this sale.
Surely that is not true . Your reply will be greatly appreciated. Regards. Norman Berry.
5 August, 2020 10:55 am
Hi Norman,
If you are over the age of 65, have lived in this property for over the passed three years as your main residence and as Tax Residents then you are exempt form Capital Gains Tax under present legislation, but if you moved back to United Kingdom before the sale then this property would no longer be their main residence, you would be selling then as Non Residents and may have Capital Gains Tax to pay.
With kind regards,
Ábaco Advisers
12 August, 2020 12:27 pm
Hi we sold our house in the UK in March and moved to our apartment in Ibiza which we have owned since 2011, we now have Residencia and are looking at relocating to mainland Spain and to buy a home there which will be our only residence with some of the profit we have made ( we still have a smal mortgage which wil be paid off when we sell), we are wondering if capital gains will be worked out on all the profit or wil it be on what’s left once we purchase a new home? Many thanks
13 August, 2020 9:50 am
Hi Sarah,
There will be Capital Gains on both the property in the UK and in Spain. Although the house in Spain has been owned since 2011 you have not been Tax Residents living in the property for the last full three years required to obtain the benefit of re-inversion in a new residential property.
Please do not hesitate to contact us shoul you have any further queries.
Best regards,
Ábaco Advisers
13 August, 2020 8:53 am
Hi! I have built an apartment in Finland 7 years ago which I have lived in as home. Now I will move to Spain and start work there. If I understood right, I need to pay some taxes in Spain if I have got some profit of the apartment selling in Finland. Because the apartment was built, there is no price of what I payed for it. Should I have all the documents what I have payed for building the house or what? I have to say that I do not have those because in Finland I don’t need those for taxiation. Do I need to pay now some tax in Spain even that I haven’t got any profit of my apartment built 7 years ago? If I don’t get this sold before I start my work in Spain?
13 August, 2020 10:54 am
Hello Marja,
If the property is not sold prior to coming to Spain the Tax would be complicated as all costs for the building would have to be justified with official receipts in order to be included in the calculation.
With best regards,
Ábaco Advisers
20 August, 2020 6:16 pm
When I sell my property in Spain and pay all relavent Spanish taxes, and then I transfer the money from the sale to my bank account in the uk am I at risk of the uk tax system ?
21 August, 2020 10:14 am
Hi David,
This is difficult to answer if the property has been sold here and you are a Tax Resident in Spain, in this case there is no problem with the UK Tax Office, if you are not Tax Residents here, then you have to declare the sale in the United Kingdom as well and under the double Taxation Treaty the Tax paid here is deducted from any libility there.
Hope this information is useful.
With kind regards,
Ábaco Advisers
6 September, 2020 6:06 pm
Selling a new build house.
My wife bought land and a new build villa near Alicante in 2006.
We have now sold property in July 2020.
Our legal adviser who is sorting the Taxation issues says that the Spain Tax Authorities will NOT accept the values in the Title Deeds for land/building and will ONLY ACCEPT receipts provided by the developer between 2004-2006 which we never had!!
All information we can find online including your site, indicates that they use the Title Deeds Values….
Is our advisor wrong?
Thanks in advance for any reply
8 September, 2020 8:32 am
Hi Robert,
It seems that the property was already built on the land and there may have been a Title Deeds to declare the new built as being done prior to you buying the house, if this is the case you can not use this declaration for the New Build as the house was completed before and should have been declared as such, without seeing all documentation we can not fully confirm but it seem your solicitor could be right.
Should you wish for us to get a closer look at your case, please contact us at info@abacoadvisers.com
With kind regards,
Ábaco Advisers
8 September, 2020 4:33 am
Hello . 4 families own a house in Spain and are all on the mortgage 65% of the mortgage is paid off on a property currently selling at 350.000 euros . One of the shareholders wants out so the other 3 are happy to buy them out . What if any is the tax liability to take one of the stakeholders off the mortgage ?
8 September, 2020 8:37 am
Hi Richard,
We will need more details to be able to give you an estimate of the process as this will vary where the property is located, initial purchase price, mortgage conditions, etc.
Please contact us at info@abacoadvisers.com or by phone at 0034 966 703 750 and we will be more than happy to assist you.
With kind regards,
Ábaco Advisers
16 September, 2020 9:32 am
Hi I’m resident in Spain but pay my taxes in Ireland, how does that effect me if I sell my house in Spain and purcgase another one in Tenerife.
17 September, 2020 7:31 am
Hi Christopher,
As a Resident in Spain you should pay your Taxes here in Spain and not in Ireland unless you have an Governmental Income which is also declared here as exempt income.
When selling you will have to apply for a Certificate of Fiscal Residency here which the Tax Office may not issue and there will be the retention of the 3% to the Tax Office on the sale which will have to be declared in a Spanish Income Tax Declaration showing the sale and the retention of the 3% next year.
Please do not hesitate to contact us should you have any further queries.
Best regards,
Ábaco Advisers
20 September, 2020 10:06 am
Hi,
We sold our house in the UK in 26th Feb 2020. We rent a property in Mallorca and are thinking of applying for residency. We have been advised that if we become residents before the end of this year we will have to pay the Spanish CGT. I have also read that if we weren’t resident here at the time of the sale we do not not. Can you clarify for us please. Thanking you in advance.
Regards.
Teresa Cooper.
21 September, 2020 8:26 am
As the property was sold in early 2020 you would not be liable to Capital Gains Tax provided that you had not been in Spain for 183 days during 2020, even if you have not applied for residency yet but had been here you could still be liable.
With kind regards,
Ábaco Advisers
25 September, 2020 8:23 am
Hi, I had a property in Spain and lived there for 7 years. My wife passed away I moved back to England and left my house empty. I paid empty property tax. Sold my house last year and 3% was kept back,my lawyer said as I paid the tax I should receive most of it back. That was over a year ago and have not heard anything I ask my lawyer after 7 months and she said I have to wait and could not put a time on it. Is there anyway I can find out if I am getting any monies back.
25 September, 2020 8:32 am
Hi Malcolm,
The process can take some time, specially in the current pandemic situation.
Your lawyer as your legal and/or tax representative can check with the tax authorities if the process is pending, has been approved or if anny issue has occurred.
Our recommendation is to check with your lawyer and for them to check with the tax authorities.
Wishing you all the best.
Kind regards,
Ábaco Advisers
2 November, 2020 11:14 am
If I was to sell my UK property (main and only home for 25years) between 1st Jan and July 3rd, then move to spain after July 4th would I be right in assuming there would be no CGT to pay as 183 days would take me into the following year, at which point I would then be considered a resident for tax purposes?.
Likewise If I sold after July 3rd and then moved over that same year I would still be safe from CGT as would still not be considered tax resident status until the following year?
Thanks!
5 November, 2020 9:15 am
Hi Mark,
To ensure that you have no Capital Gains Tax Liability the most efficient way is to sell the property the year before coming to Spain to take up Residency irrespective of when the property is sold during the year. Therefore if you sell the property at any time during 2021 the best time to come to Spain at the minimum would be the very end of 2021 allowing for the time scale for preparing and obtaining the required documentation and apply for Residency in January 2022.
Hope this is of assistance to you.
Kind regards,
Ábaco Advisers
22 January, 2021 3:45 pm
Hi
I am a non resident who purchased a property in 2003 for 100,000 euros (official price on the deeds)
I am selling for 280,000. As part of my sale I have 23,500 euros worth of furniture fixtures and fittings paintings etc. Would it be acceptable to list the sale figure for 256,500 and fixtures and fittings at 23,500 euros?
Also, I thought I was buying a freehold property but after owning it for a few years discovered it was a leasehold, which I believe is very unusual. The Spanish lawyer failed to inform us of this. As I do not own the land would there be any Plusvalia tax to pay?
27 January, 2021 8:13 pm
Hi Ray,
Yes, it would be ok to list a sale figure for the property separate of the fixtures, fittings and furniture.
Regarding the freehold property situation we would need to see a copy of the Title Deeds to check this situation for you.
If interested you can send this document to our email at info@abacoadvisers.com
With kind regards,
Ábaco Advisers
24 January, 2021 5:01 pm
CGT.
My wife is a resident in Spain, I am not.
Am I able to transfer the property into her name (soul ownership) thereby avoiding CGT in 3 years time when we sell it?
Thank you.
25 January, 2021 12:42 pm
Dear Alan,
Many thanks for contacting us in relation to your Spanish property.
In order to transfer the Spanish property into one sole name, we would proceed via “extinction or dissolution of co-ownership” and for legal and fiscal implications it has to be distinguished from an ordinary sale or donation. This way of transfer can be chosen independently from you being non resident and your wife resident in Spain. There is no need for you to travel to Spain if Power of Attorney is granted in favour of our Lawyers and this can be arranged in the home country.
For further advise and preparation of estimate regards expenses and taxes arising, kindly let me have following information and documentation:
– Copy Title deed
– Last IBI (SUMA) bill
– Compensation (price) agreed
I hope all information is clear and helpful, but please do not hesitate to let me know, should you have any further queries. You may contact us directly at mw@abacoadvisers.com
Looking forward to hearing from you.
Kind regards,
Ábaco Advisers
25 January, 2021 5:04 pm
CGT.
My wife is a resident in Spain, I am not.
Am I able to transfer the property into her name (sole ownership) thereby avoiding CGT in 3 years time when we sell it?
Thank you.
27 January, 2021 8:11 pm
Dear Alan,
Many thanks for contacting us in relation to your Spanish property.
In order to transfer the Spanish property into one sole name, we would proceed via “extinction or dissolution of co-ownership” and for legal and fiscal implications it has to be distinguished from an ordinary sale or donation. This way of transfer can be chosen independently from you being non resident and your wife resident in Spain. There is no need for you to travel to Spain if Power of Attorney is granted in favour of our Lawyers and this can be arranged in the home country.
For further advise and preparation of estimate regards expenses and taxes arising, kindly let me have following information and documentation:
– Copy Title deed
– Last IBI (SUMA) bill
– Compensation (price) agreed
I hope all information is clear and helpful, but please do not hesitate to let me know, should you have any further queries. You may contact us directly at mw@abacoadvisers.com
Looking forward to hearing from you.
Kind regards,
Ábaco Advisers
8 August, 2021 7:18 pm
Good afternoon
My brother had an apartment he inherited from my father who dead 4 years ago , when he decided to sell that apartment 84m2 , the taxes told him that he will not be able to sell , it until he pays 480,000 € , I think a Capital gain tax or personal income tax not really sure ?!!
Is that possible? Or that big value tax can be my father taxes that he did not pay during his life time !!
Please explain to me .
Thank you
9 August, 2021 7:28 am
Hello,
It does seem to be a quite elevated sum, it all depends on the value of the property on one side and undeclared personal incomes. We would need to see all documentation of this case to better inform you about it.
Should you wish to contact us please do so at info@abacoadvisers.com
With kind regards,
Ábaco Advisers
25 August, 2021 3:40 pm
I have recently sold my house in July in SanFulgencio and Ihave a number of questions regarding the 3% retention tax.It sold at 238,000 e and the retention was 7140e.
I have a copy of the Copia Simple from my original purchase in 2005 and the buying price is shown as 212410 e and further into the document says 7% IVA has been paid on the buying price although a specific figure is not shown I calculate this as 14868.70 e. My deed also mentions payments made to Municipal taxes and Plus Valia but no exact figures are stated so I can’t use them.
Is it accepted practise to use the buying price + the Calculated IVA as my basis of the true buying price. i.e 227279 e?This would leave a notional profit of 10721 e on which I could pay CGT.As a UK taxpayer I think my status is Non resident ,non EU or EEA so I think I am taxed at 24% (or is it 19%)?
I know I can offset some deductions from this.I have invoices from
estate agent 7199.50
Notary fees. 451.55
Solicitor selling fee. 726.00
I also had charges in July and August for updating the land registry records for older renovations but don’t know if these are allowable as without them the sale could not have progressed
Solicitor fees. 735.71
Land Registry. 312.74
I have an invoice (no NIE shown on it) for renovations from 2005 with appropriate Town Hall licence
Reforms. 8380.00
I have also read that Plus Valia tax is permitted as a deduction and it states in my Selling Deed 2365.00 has been paid.Is this too an allowable deduction.
I am assured that my non resident wealth taxes are paid up to date but assume this could be checked with the Agencia Tributaria
Is it true I only have 3 months to claim and is this something you may help with?
What are typical fees for this service if you undertake this type of work?
Sorry it’s long winded but it’s very complex for me and I’ve been receiving conflicting and confusing advice from elsewhere so wanted to clarify simply which you usually do from the blogs I’ve seen here
26 August, 2021 10:42 am
Hi Joe,
Thank you for contacting us, the information is correct, you have 3 months to claim the 3% retention back and you can check with the Agencia Tributaria if you are up to date with all your taxes.
We only assist our fiscal/tax clients with the service of claiming back this 3% retention.
Regarding the calculation and possible deductions you can apply the invoices for the notary, land regsitry, legal/solicitor fees and estate agent fees. The invoices regarding renovations might be more difficult to be able to include as you have to be able to prove they are related to the sale and they have to be works that are considered improvements and not renovations or conservation expenses of the property. Lastly the Plusvalía you will have to present the proof of payment to be valid.
Please do not hesitate to contact us should you have any further queries.
Kind regards,
26 August, 2021 1:02 pm
Hi Oscar
Thank you for the advice (2nd message sent in error)
Are you able to advise on the 1st 2 paragraphs in particular?
Many thanks again
26 August, 2021 1:33 pm
Hi Joe,
The retention on the amount of 7.140 € corresponds to 3% of the 238.000 €.
Regarding the copia simple from 2005 you will need to present the payment of the 7% IVA and the proof of payment of the Plusvalía Tax. Regarding the Municpal Taxes, if you are referring to the IBI this will not be able to be included in your calculation.
For non-residents, the capital gains tax rate is 19% of the profit made on the sale.
To calculate this profit we must work out the true purchase price:
-> Purchase price (as written on the Title Deed) + costs incurred in the purchase
The purchase costs that will be taken into account include the VAT, Land Registry fees, Notary fees, Transmission Tax and Legal fees.
We then take your current selling price and deduct from it the costs incurred in the sale (legal fees etc). We can also deduct certain costs of major structural alterations you have made to the property – but only if you can produce the official receipts for the materials and/or work involved. We can not do this if you paid by cash and have no VAT receipt.
These calculations will leave us with a final sale figure.
-> Final sale figure – true purchase price = net profit
Hope this solved your queries. Should you need anything else, just let us know.
With kind regards,
Ábaco Advisers
25 September, 2021 9:18 am
When buying my villa in spain I4 years ago, I had my son put on deeds, although he didn’t pay a euro towards it. In the last year I have had him taken off the deeds legally, to avoid paying Capital Gains Tax.
I now wish to sell because my husband has died. I am 71 years old and I have put a tax declaration for. in each year, With no tax to pay each year.
I’m unable to afford to live here on one British state pension. It doesn’t cover for the upkeep of the Villa, garden, pool and other jobs. Plus I have a heart condition.
I’m now the only name on deeds. I’m the only one who paid for the Villa.
What capital Gains and cost will I be liable for. I bought the Villa for 160,000 and I’m selling for 390,000 euros. Kind Regards Margaret Benee.
Ps. I have spent over 100,000 on improvements but not kept bills
27 September, 2021 10:12 pm
Hi Margaret,
EEA/EU vendors who are non resident in Spain when selling their property pay 19% capital gains tax, if you are non resident from outside of the EU you pay 24% capital gains tax. On the other hand if you are a resident in Spain when selling your property you will pay a certain % depending on the profit.
The scale looks like follows:
-> 19% for the first €6,000 profit
-> 21% for profits between €6,000 and €50,000
-> 23% for any profit above €50,000
With kind regards,
Ábaco Advisers
20 October, 2021 10:29 am
i have recently sold our property in mallorca and have paid all the taxes and charges. do i have to pay any British tax
20 October, 2021 1:37 pm
Hi Stephen,
If you are a resident in the UK we would recommend speaking to your tax advisor to arrange any possible taxes you may be responsible to pay.
With kind regards,
Ábaco Advisers
8 November, 2021 6:11 am
Good morning
If i paid 610kEUR + 75k in stamp duty and fees for my property in Spain and sell it for 850k will i be liable for CGT on the 240k from purchase price or 165k which it purchase price plus the costs of buying?
Kind regards
Michael
8 November, 2021 11:45 am
Hi Michael,
You may deduct the purchase cost such as legal fees, notary, land registry and taxes, and from the sale you may deduct any legal fees, plusvalía tax, commission paid to the possible agency and any official alterations of the property that have been declared and included in the Land Registry.
Hope this information is useful.
With kind regards,
Ábaco Advisers
6 March, 2022 2:49 pm
I have an offer for my property in IBIZA and the buyer wants to conclude the sale in May 2022. I am over 65 and therefore CGT will not apply, however do I have to complete 6 months of residency in Spain i.e. from January to July 2022 to avoid any further taxation on the sale
6 March, 2022 4:05 pm
If you are over 65 and have been a resident in Spain and have lived permanently in the property (as your main residence) for the last 3 years, then you can sell with no CGT.
With kind regards,
Ábaco Advisers
29 March, 2022 5:04 pm
Hi, I am and have been a tax resident in Spain for 15+ years. I purchased a property in Marbella in 2014 and initially lived in it as my primary residence for several years. After meeting my girlfriend it made sense for a number of reasons to move into her rented house in Benalmadena where I live today. As my house was empty I rented it our on a long term basis to generate some form of income. The property in Marbella is the only property either of us own.
We would now like to buy a property which would become the primary residence for both of us. If I sell my property in Marbella to contribute towards the new home would I be required to pay CGT or would I be exempt from paying this if 100% of any gain was re-invested into what would be our combined primary residence. I understand that I would not have been living in my owned apartment for 3 years+ prior to selling as a primary residence but it is my only owned property (not a second home) and I assume the purpose of this exemption is to prevent wealthy owners of multiple homes from benefiting not prevent owners of a single home from benefiting from the exemption when looking to reinvest into a new family home in Spain after circumstance made renting the most appropriate option prior to the sell? Thanks
31 March, 2022 3:51 pm
Hi Danny,
Unfortunately the exemption only refers to your prime property where you have resided for at least 3 years as a Tax Resident, justification of which you would have to prove is being on the Padron in that property, registered address on SIPP cards driving licence, usage of Electric, Water Etc, One of the main points that would prove to the Tax Office that it was not you registered and actual address would be the fact that it has been rented and therefore you would have declared the inocme on your Tax Declaration which would show you were not living in the House, also if it was holiday rentals you would have the property registered with the authorities as such. Therefore Capital Gains Tax would have to be paid.
With kind regards,
Ábaco Advisers
5 April, 2022 5:41 pm
My friend in Ireland is now 70 and has a Holiday apartment in Spain for about 10 years .does does he have to pay CGT on profit and at his age and what about the 6 year rule ????
5 April, 2022 8:22 pm
Hi Michael,
Yes, he will have to pay CGT as it is a holiday home in Spain and he is non-resident in Spain.
With kind regards,
Ábaco Advisers
2 May, 2022 12:13 pm
I am Spanish resident, UK citizen. I have lived in Spain for 16 years. I have paid Spanish income tax and other property transfer taxes etc for 10 years. I am selling my current property which I have lived in as my principal residence for 4 years. I will re-invest most of the funds from the sale into another property in Spain. I am looking at a new off plan property to re-invest the funds. What evidence do I need to provide to the Spanish tax authorities to prove the funds are being re-invested albeit a few months after I have sold my current home.
2 May, 2022 1:31 pm
Hi Stuart,
You will require the Title Deeds for both the sale and purchases and this is declared in your Income Tax Declaration presented in the year of the sale.
With kind regards,
Ábaco Advisers
8 August, 2022 10:16 am
Hi , I am a 1 third owner of a property in Spain . One of the stake holders wants out . What’s the best approach in the other 2 parties buying this person out ?
9 August, 2022 7:03 am
Hi Dara,
A normal sale or what is called in Spain “extinción de condominio” which is the dissolution of the situation of common ownership of a property. The most common cause for the extinction of the condominium is the will of the owners not to continue to form part of its ownership.
Should you need any assistance do not hesitate to contact us at info@abacoadvisers.com
With kind regards,
Ábaco Advisers
18 August, 2022 7:55 pm
We are considering moving back to the UK ,we would sell our property in Spain likely at a loss or small profit, we would be renting in the UK,we are residents in Spain but presume we would not be once we left Spain
We would need help nearer the time but just after a idea to work out our costs
Thanks john
19 August, 2022 9:48 am
Hi John,
Should you wish assistance with the sale process and an estimate cost of the process, do not hesitate to contact us at info@abacoadvisers.com
With kind regards,
Ábaco Advisers
24 October, 2022 4:09 pm
Good day,
We are both over 68 and we have been living on our house for 3 years and 6 months . We now need to sell and move.
We are both fiscal residents if Spain .
1) I believe there is no capital gain because of our age ..
BUT
Do we have to reinvest this money into another property to to benefit from this non taxed gain .
24 October, 2022 4:18 pm
Hi,
You will not need to pay capital gains in your case and you do not have to reinvest this money, you will have to declare it in your next year tax declaration and you might be liable to pay plusvalía tax (local tax when selling a property).
With kind regards,
Ábaco Advisers
23 January, 2023 9:07 am
Hi, I am a Spanish resident looking to sell my property in UK and will pay capital gains tax. A lot of structural work has been done to the property which can be discounted but I do not have all the VAT receipts as these were lost. Is there any way around this – valuation of property post work etc? Thank you
23 January, 2023 9:12 am
Hi James,
You need to present the original invoices including VAT otherwise these will not be possible to include them.
Sorry for the inconvenience.
With kind regards,
Ábaco Advisers
21 February, 2023 1:13 pm
Hi I sold my house in Spain 18months ago but wish to buy another in a diferent area will I still have to pay 10% tax on new property regards Philip
21 February, 2023 2:15 pm
Hi Philip,
Unfortunately that would be correct if that is the transfer tax to be paid in the region the property you are investing is in.
With kind regards,
Ábaco Advisers
3 March, 2023 2:40 pm
I am a non-resident in Licante Province, which I have sold. with regard to structural changes, I had replaced the original single glazed windows with double glazed on for the entire finca. Furthermore, I had replace the original PVC pool cover (which was twice blow away by heavy winds) with a telesopic pool cover with max. height of 1,2m, which did not require any official permit. Are these expenses deductible from my CGT?
6 March, 2023 9:24 am
The Pool coverings will not be deducted from the Capital Gains Tax, the window may be depending on the paperwork and when completed, however it will be the Tax Office who will confirm this on revision, if they are not in agreement then they will revision the Calculation and issue a new request for payment including a fine.
Do not hesitate to contact us should you have any further queries.
Best regards,
Ábaco Advisers
30 May, 2023 8:35 pm
Hi, interesting article, I have a small question I am selling the house we’ve had for 15 years for €220,000, however, when we bought the property we paid €120,000 as cash and took on the existing owners mortgage of 110,000 so the cost of us buying the property is 230,000, reading your article. It’s sort of implies that there is a €10,000 capital gains, is this correct? Is my assumption correct?
31 May, 2023 4:24 pm
That would be more or less correct, but you may take in consideration that you may be able to reduce the capital gains tax with certain cost both in the purchase and the sale of your property, such as estate agency commission, notary and land registry fees from the purchase, tax paid when purchased, legal fees paid both in the purchase and the sale and plusvalía tax if paid on the sale.
With kind regards,
Ábaco Advisers
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