Calculating capital gains tax in Spain

Taxes Mon, 18 May 2015
Capital gains tax in Spain

Capital gains tax is a tax applied in most countries. If you sell your property then a proportion of the profit you’ve made should be paid to the government as tax.

In Spain, capital gains tax is due on the profit you make on all property sales. The exact amount you pay will depend upon whether you are a resident or a non-resident.

For non-residents, the capital gains tax rate is 20% of the profit made on the sale. This is worked out according to the following calculation in three stages:

  1. 1. Work out what the true purchase price was
    • 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. Work out 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.

We can then work out:

  • Final sale figure – true purchase price = net profit

If you have made alterations to your property and you have not included these in your Title Deed this needs to be rectified at the point of sale.

Residents selling their home in the UK

If you are a resident in Spain and sell your property in the UK then you are also liable to pay capital gains tax here. You must declare the income from the sale on your annual resident tax declaration. Remember though that this declaration covers the previous year, so if you sold your house in May 2015 you would declare it in June 2016 and not in this year's declaration.

There are currently other potential changes underway in relation to the sale of second homes in the UK. 

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