Capital Gains Tax

Flat 35% Tax If Non Resident

If you are non resident in Spain, you pay a flat 35% tax on capital gains.

Advantages For Residents

Again, the residents have advantages: The capital gains become part of their income tax for the year of sale (unless the gains are used for reinvestment in a new permanent dwelling), with a roof of 20% tax on the gains.

Also, a resident will not suffer any retention in the sales price of a dwelling, while the buyer is obliged to retain 5% of the declared purchasing price if the vendor is a non-resident and if his escritura is not from before 31st of December 1986.

If the purchasing escritura of the non-resident vendor dates from before 31st December 1986, there are no capital gains taxes and subsequently no retention.

Retention By Buyer

If a retention of 5% from the declared sales price is made by the buyer, paying the retained sum on form 211 in a Spanish bank to the Hacienda, the non-resident vendor must make a calculation of his capital gains and the possible taxes to be paid.

If Vendor's Tax Is Equal To Or Higher Than 5%

Are the taxes eventually to be paid equal to or higher than the 5% retained, he should leave the money with Hacienda and do nothing.

If Vendor's Tax Is Equal Less Than 5%

Are the taxes to be paid substantially less than the sum retained, he must submit an application to the Hacienda to have the difference devolved. Your fiscal representative will assist you in preparing the application.

Important Documents To Have

It is important for you to have copies of both your purchasing and sales escrituras, as well as a carbon copy of form 211 that the buyer used for paying in the retention.

It may take some time before the money is returned!

NB: Make sure that the buyer really makes the 211, or you as the vendor may not present the 210