Have you bought a property, apartment or villa in Spain to spend your vacations, earn rental income or live in? Generally speaking, as the years go by, the value of the property increases and resale becomes even more profitable, especially if you've bought an apartment or house to renovate and have therefore greatly improved it!
It is therefore necessary to pay thenational real estate capital gains tax ("plusvalía estatal", "plusvalía de Hacienda" or "plusvalía relativa al IRPF").
What is added value?
When you sell your home, the capital gain or loss is reflected in the difference between the sale price and the purchase price of your home. The capital gain you make is called the national capital gain.
The Spanish State will tax this profit to the owner, whether you are a Spanish resident or not. However, there are cases oftotal or partial tax exemption.
How to calculate real estate capital gains?
Asset gain (+) or asset loss (-) = Sale value - Acquisition value
How do you calculate acquisition value?
Actual purchase value + Taxes and acquisition costs + Reforms and insulation investments - Depreciation
How do you calculate the sale value?
Actual selling value - Taxes and selling expenses
The difference between real estate capital gains and losses
If the sale price exceeds the purchase price, this represents a capital gain. If the sale price is lower than the purchase price, this is referred to as a capital loss.
Of course, if you have a capital loss, you won't have to pay taxes when you sell your home. What's more, there are tax credits for the four years following your capital loss.
Taxation of real estate capital gains for non-residents
Under Spanish law, it is the buyer who pays this tax.
In effect, the purchaser must withhold 3% of the total sale price and pay it back to the Treasury on the date of signature of the sales contract. In this way, the administration ensures that the seller pays theIRNR corresponding to the capital gain.
Non-resident sellers deduct 3% of withholdings, and are required to submit IRNR declarations within a maximum of 3 months of the sale and provide all required supporting documents.
Once this tax has been calculated, the administration will refund the difference to the seller in the event of overpayment, and will require him to pay an additional amount in the event of underpayment.
The real estate capital gains tax for non-residents is 19% for taxpayers residing in a European Union member state and 24% for taxpayers residing outside the European Union.
Real estate capital gains tax for residents
Are you resident in Spain (and paying taxes there) and selling your property?
The sale istaxed by the Spanish tax authorities as part of theIRPF income tax ("Impuesto sobre la Renta de las Personas Físicas").
The tax rates applicable to real estate acquisitions are graduated as follows:
- 19% capital gains tax on the first €6,000
- 21% for capital gains between €6,000 and €50,000
- 23% for capital gains over €50,000
Interested in buying an apartment or house on the Costa Brava? Contact the real estate agents at N1 immo and visit properties that match your search criteria!
