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Spanish Property Taxes Cut

Spanish government reduces capital gains and withholding tax for non-resident overseas investors selling property.
Intense, lengthy lobbying by non-residents who own property in Spain has resulted in the country’s government lowering the rates of capital gains and withholding taxes charged when overseas property investors sell, putting the rates in line with those charged to resident vendors.

Non-resident property vendors has been charged 35 per cent capital gains tax, which has now been reduced to 18 per cent.

As for withholding tax, non-residents were charged five per cent of the official sale price of their property, which would be withheld by the purchaser for payment to the local hacienda (i.e. tax office) within 30 days. This unusual arrangement was due to the hacienda’s fears that non-resident vendors would leave Spain before they had paid the capital gains tax due on their sale, and they used the withholding amount as a safeguard. Once the hacienda had worked out the capital gains tax due on the property sale, they’d reimburse the seller with the withholding tax – unfortunately, in practice, this took months and occasionally years! The withholding tax rate for non-resident vendors has now been reduced to three per cent.

The bottom line is that, if you own a property in Spain, and are a non-resident, you’ll now walk away with more money on the day of sale than before.
For further details of the property market in Spain, including legal and tax requirements, please refer to the Guide section, accessible via the toolbar at the top of this page.
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