Property Related Tax
These notes are intended as a guideline to income tax in Spain and should not be used as a substitute for proper professional advice. Please contact us and we will be happy to assist you.
- 1. Sale of Spanish property by non-residents
- 2. Sale of Spanish property by residents
- 3. Taxation of Spanish rental income of non-residents
- 4. Wealth Tax- Impuesto Sobre el Patrimonio
- 5. Local property tax- Impuesto Sobre Bienes Inmuebles (IBI)
- 6. Transfer tax on purchase of Spanish property- Impuesto sobre Transmisiones Patrimoniales (ITP)
- 7. Plus-valia (land appreciation tax)
Sale of Spanish property by non-residents
In order to comply with EU non-discrimination regulations,
capital gains tax rates for both residents and non residents
were equalised from 1st January 2007 onwards. Current tax rates and allowances.
For properties 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.
The balance of tax payable / reclaimable is settled by the vendor on submitting form 210, within a further two months.
Sale of Spanish property by residents
This 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.
This is available for resident taxpayers over 65, who have lived in property for at least 3 years.
Taxation of Spanish rental income of non-residents
Rental income is taxable at the following rates:
|Citizens/ residents of EU countries, Iceland and Norway||19%|
For residents of the EU, Norway and Iceland, all rental expenditure (including mortgage
interest) is tax deductible. For others, there are no
allowable tax deductions and the entire rental income received
is taxable. This must be declared by submitting Form 210.
For non-rented properties an annual tax return, Form 210, must also be submitted. Further information on non-residents´ tax in Spain.
Wealth Tax- Impuesto Sobre el Patrimonio
After having been previously abolished in Spain on 1st January
2009, Wealth Tax then re-introduced on a "temporary" basis for the
years 2012 and 2013, and then again from 2015 onwards.
The current tax-free allowance for non-residents is 700k Euros.