Calculation of capital gains tax on the sale of real property in Spain. Spanish Tax rate for non-residents

Capital Gain tax in Spain; The difference between the value of the transfer and the readjusted acquisition value constitutes the Spanish capital gains subject to tax.

If the property in Spain is being transferred by a natural person who acquired it prior to 31^st December 1994, the gains established according to the above will be reduced as such transfer is subject to a transitory system.

If the transferor acquired the property on two different dates or improvement works have been carried out at the property, the calculation must be made as if it concerned two different Capital gains.

Partial exemption:

A 50 percent exemption applies to capital gains deriving from the sale of urban real properties located on Spanish territory and acquired between 12^th May 2012 and 31^st December 2012. This partial exemption does not apply:

To natural persons, if the property was acquired by or transferred to their spouse or any other individual with whom the taxpayer has a family relationship.

To entities, when the real property was acquired by or transferred to an individual or entity with whom there exists a family link in the direct or collateral line, by blood relation or affinity, up to and including the second degree.

Spanish Tax rate for natural persons not residing in Spain:

The natural or legal person acquiring the property, whether resident or non-resident, is bound to withhold and pay to the National Treasury 3% of the agreed price, which will be considered a payment on account of the Spanish tax due on the income deriving from this transfer and payable by the seller. To this end, the purchawer must deliver to the non-resident seller a copy of the form 211 used to pay the withheld amount to the Spanish Inland Revenue, to allow the latter to deduct this amount from the amount due resulting from the statement of the Spanish Capital gain obtained. If the amount withheld exceeds the amount payable, the excess payment can be recovered.

If the 3% Spanish withholding tax is not paid to the Inland Revenue, the al property will be subject to payment of the withholding or the actual tax, whichever is the smallest.

More information on the calculation of Spanish capital gains tax and readjustment coefficients can be found here!

Additional information concerning the procedure of purchase and sale and its Spanish tax implication can be found on this specialised microweb regarding transfers of real properties in Spain.

Do not hesitate to contact this firm of lawywers and economists Arcos & Lamers Asociados in relation to any matter of a fiscal, legal or accounting nature.

María Teresa Arcos, lawyer in Marbella

Wim Lamers, economist in Marbella.