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If you\u2019re selling a property in Spain, there are certain tax implications. These differ from property sale taxes in the UK, and it\u2019s important to understand your obligations to ensure that you don\u2019t fall foul of the law.<\/p>\n
There are two types of Spanish property tax which will affect the sale of your property, which we\u2019ll look at in detail below:<\/p>\n
Plusvalia is a form of tax which must be paid to the town hall where your property is located. Plusvalia is calculated on the following criteria:<\/p>\n
Land value can be found on your IBI receipt. It increases every year, regardless of the actual market value of your house. This means that Plusvalia is due on your property, even if you\u2019re going to lose money when selling it.<\/p>\n
This matter is currently being challenged in courts throughout Spain, but to no practical effect. Put simply, when you sell your Spanish property, your local town hall will demand a payment.<\/p>\n
It can be beneficial to try and avoid any nasty surprises by contacting your local town hall and requesting a calculation of Plusvalia before you sell your property. This way, you will have a rough idea of how much you will be required to pay.<\/p>\n
If you are a non-resident, the buyer of your property could be found liable for payment if you have not paid the Plusvalia tax within 30 days of a sale going through. It is important to make the payment of Plusvalia a priority when selling a property in Spain, to avoid any unnecessary legal implications.<\/p>\n
As a seller, you are obliged to pay capital gains tax on any profits from your sale. Capital gains tax on property in Spain for residents currently sits on a sliding scale, between 19-23%. If you are a non-resident from an EU\/EEA country, you\u2019ll be expected to pay a flat rate of 19%.<\/p>\n
If you are a non-resident from outside the EU\/EEA, you\u2019ll be required to pay 24% in capital gains. When selling your property, your buyer will also be required to withhold 3% of the property purchase price to pay to the Spanish tax authorities.<\/p>\n
After you sell, you should file a tax return which accounts for the amount of the purchase price initially retained by the buyer of the property (typically 3%). You\u2019ll need to pay the remaining amount of your capital gains tax within three months of the sale going through.<\/p>\n
If the amount the buyer withholds exceeds the payable for capital gains tax, you may be able to claim a refund for the excess amount. It is therefore important to obtain proof of the original 3% tax paid by the buyer before filing your return and filling in any other necessary forms or legal documents.<\/p>\n