Taxes On Personal Real Estate in Spain


Posted and filed under Taxes in Spain.

We thought that it might help to recap on taxes on property that apply at the present time, as it is so confusing.

1) Sale of Spanish property 

Capital gains tax is payable on the capital gain if appropriate.

For properties of non-residents purchased after 1986, 3% of the declared sales price is withheld from the vendor at the point of sale. This is paid by the purchaser (normally via their solicitor) by submitting form 211, within one month of the sale.

2) Sale of Spanish property by residents

Income tax is payable on the capital gain if the property has been held for more than one year.

Rollover relief is available when the proceeds of the sale are reinvested, within two years of the sale, in the taxpayer’s new main residence.

The taxpayer must have lived in property for 3 years, or had to sell because of change of job, marriage or separation.

The gain is deferred and taxed on the sale of the new property.

The sale must still be declared in the annual tax return.

Absolute relief is available for resident taxpayers over 65, who have lived in property for at least 3 years

3) Taxation of Spanish rental income of non-residents

Rental income is taxable at a flat rate with limited deductions.
This must be declared on a quarterly basis, submitting declaration 210 or 215.

4) Wealth Tax- Impuesto Sobre el Patrimonio

Wealth Tax was abolished in Spain from 1st January 2009 but re-introduced for 2012, 2013 and from 2015. There is a tax free alllowance of 700,000€ plus 300,000€ for the main residence.

5) Local property tax- Impuesto Sobre Bienes Inmuebles (IBI) or commonly known as SUMA

This is an annual tax based on the Cadastral Value of the property. The rate varies according to the local authority.

6) Transfer tax on purchase of Spanish property- Impuesto sobre Transmisiones Patrimoniales (ITP)

This is payable in situations where there is no VAT (e.g. buying a resale property).

The rate depends on the area of Spain (Comunidad Autonoma). Ask us for more information.

7) Plus-valia (land appreciation tax)
This is payable by the vendor, although sometimes the purchaser agrees to reimburse the vendor as part of price negotiations. The rate of taxation is determined by each local authority and is based on land values.

We can provide you with up to date information on all taxes in Spain. 

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