Capital gains for non-residents

Non-residents in Spain who sell their Spanish properties must pay capital gains tax. The capital gain or loss when selling properties is calculated as the transfer price less the acquisition cost. In this article we want to share with you information of great importance about capital gains for non-residents.

What you should know about capital gains for non-residents?

If you are selling your Spanish property and you are non-resident in Spain, the buyer is obliged by our tax laws to retain 3% of the purchase price and to pay it to the Tax Authorities on your behalf, as a payment in advanced towards your final capital gains tax bill. This does not happen to seller who are resident in Spain. They will declare the sale of their property, and any potential capital gains, through their usual Income Tax return, filed in June of every year.

Do not forget the IIVTNU, the tax on the Increase in the Value of Urban Land or “Plusvalía Tax”, as it is widely known. In this case, all sellers, whether they are residents or not, must pay this tax on the increase in the value of the urban land when they sell their property.

Likewise, the tax base must also be taken into account, which is the cadastral value of the land at the disposition date multiplied by a certain percentage. This percentage is calculated as the number of years the land remained multiplied by a coefficient of 3 to 3.7.

The rate is established by each municipality and can reach up to 30%. If the owners decide to give the property as a gift or inheritance, it will be the beneficiary who would have to pay this tax. Do you want help with this topic? You need the best professionals.

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