Spain Tax

                          Capital Gains Tax

As in the UK, the profit you make on certain transactions is subjected to Capital Gains Tax, which in both countries is at a rate of 18%.

The difference here in Spain is that, if you are under 65, you are liable to Capital Gains Tax, if you sell your main residence, even if you are a tax residence. Over the age of 65, and having been a Spanish Tax Resident for 3 years, you are exempt from this on your main residence. Only one of a married couple would need to have attained the age of 65.

Capital Gains Tax is paybale on the difference between the buying price and associated costs, indexed to give a current equivalent value, and the selling price and costs. Some older purchases are subject to a more complex calculation. Having a mortgage to repay, reduces the Capital Gain, which is one reason why you should have a mortgage here.

Non-Tax Residents, who own property here and decide to sell, have 3% of the sale price held back. This also includes people, who reside in Spain permanently, but have not registred in the tax system, for whatever reason. The 3% usually covers the capital gains tax due, which is why that amount is held back. Imagine trying to get tax from someone, who lives in another country.

Some investment products are subjected to the same 18% CGT, there are ways to mitigate this legally, and to reduce the average rate over a 20 year period to a little under 8.50%.

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