Capital Gains Tax Upon selling your Sotogrande home in Spain.
Spain is not an exception. Capital Gains Tax (CGT) is applied to stocks, property (land, apartments, and villa,) government bonds, and any other assets and investments once you sell, and of course as long as you have made a profit.
There is a difference in the rate of tax, depending on if you are a tax resident of Spain. Please see the table below:
| CONDITION | REALIZED PROFIT | CAPITAL GAIN TAX |
| Tax Residents in Spain | 6.000 € | 19% |
| Tax Residents in Spain | 6.000 € to 50.000 € | 21% |
| Tax Residents in Spain | > 50.000 € | 23% |
| Residents of EU (Not Spain) | Flat Rate | 19% |
| Residents outside EU | Flat Rate | 24% |
- For tax residents of Spain, Capital Gains Tax (CGT) starts at 19% on the first €6,000 realized profit, 21% from €6,000 – €50,000, and 23% CGT for anything above €50,000 in profit.
- For Non-residents of Spain pay a flat 19% if they are residents of an EU country.
- For Non-residents from outside the EU the rate is 24%.
Capital gains tax is based on the purchase price as expressed on the Title Deed including VAT, land Registry fees, notary fees, transmission tax, and legal fees. These amounts are deducted from the final sale price, less costs incurred during the sale including legal fees and agency fees.
There are two main exemptions. Main residence and age (over 65 years).
If you are over 65 years of age the CGT is not applicable to you, however you must have lived in the property for three years or more to qualify for no CGT.
You are also legally exempt from paying capital gains tax if from the proceeds of the sale of the property you buy another home which is your sole and main residence. Both properties, the one you sell and the one you buy MUST be your habitual residence. This exemption applies to both tax residents of Spain and non-tax residents provided the non-tax resident is a resident of any European Union country that has a tax agreement with Spain. Also of importance, you must reinvest the proceeds of the sale within a two-year period.
Disclaimer: Please note the material contained in this blog is for informational purposes only and does not constitute or imply a substitute for professional financial, legal or taxation advice. This information is general in nature and has not taken into consideration your specific personal circumstances. It is strongly recommended you get professional advice from regulated and/or registered qualified professions: financial advisors, accountants, lawyers.
Thank you for your interest, Charles Gubbins.
Charles Gubbins.
✉ charles.gubbins@noll-sotogrande.com
? +34 607 911 661
