Capital Gains Tax in Spain

Overview

When you sell an asset in Spain for more than you paid for it — property, shares, investment funds — the profit is generally taxed as a capital gain, under the 'savings income' part of IRPF, at different rates from your regular employment income.

Requirements

• Applies to Spanish tax residents on worldwide capital gains, and to non-residents on gains from Spanish assets (such as property) under the separate IRNR regime

Step-by-step process

• Calculate your gain as the difference between the transfer value and the acquisition value, adjusted for allowable costs (such as purchase and sale expenses, and improvements for property)
• Apply the savings income scale, which is tiered and generally rises from around 19% on the lowest band up to 30% on gains above roughly €300,000 — these tiers are reviewed periodically, so always check the current year's figures
• Check whether an exemption applies to your specific situation — the two most common are the reinvestment exemption for your main home, and the full exemption for sellers over 65 selling their main home
• Declare the gain on your annual tax return for residents, or file the specific non-resident form (Modelo 210) within the required window if you're a non-resident seller

Required documents

• Proof of the original acquisition cost and date
• Proof of sale price and any deductible transaction costs

Common mistakes

• Not realising that selling your main home before age 65 without reinvesting in another main home within the required window (generally two years) means the gain is fully taxable
• Forgetting that non-residents selling Spanish property have a buyer withholding (3% of the price) applied automatically, which is a payment on account, not the final tax — you still need to file the final settlement

Practical tips

• If you're over 65 and selling your main home, the gain is exempt regardless of what you do with the proceeds — no reinvestment is required
• For other assets sold by those over 65 (not your main home), a separate, capped exemption exists if the proceeds are used to buy a life annuity within six months — worth checking if it applies to your situation

How Tuchati can help

If you're planning to sell an asset and want to understand what you might owe, Tuchati can help you understand which rules and exemptions could apply to your situation.