Capital Gains Tax in Spain is payable on the profit from the sale of certain assets in Spain, including antiques, art and jewellery, stocks and shares, property and businesses.
Exemptions from Capital Gains Tax on Property
Residents over 65 are exempt from this tax on the profit made from the sale of their principal home, irrespective of how long they have owned it.
Importantly the Spanish Tax Office defines “a principal home” as the place where you have lived permanently for at least 3 years; thus residents below 65 are exempt from CGT on the profit made from the sale of their principal home, provided that all the profit is invested in the purchase of another principal home in Spain within two years of the sale.
Any profit that is not reinvested is subject to CGT at the income tax rate.
Gains revealed as a result of the death of a taxpayer, gifts to government entities and donations of certain assets in lieu of tax payments are exempt from CGT.
Capital losses can be offset against capital gains, but not against ordinary income.
Capital losses in excess of gains can be carried forward to offset against future gains for a five-year period.
Capital Gains Tax Rates
On January 1,2010, Spain raised its CGT from 18% to 19% on profits up to 6.000 Euros made in one year.
As of June, 2010, the tax increase is frozen at 19% for non-resident property sellers, meaning they pay only 1% extra.
Capitals Gains Refunds
The European Court of Justice has ruled that non-resident sellers, all the way back to 1997, can claim a refund for any excessive CGT that they paid. The European Court of Justice over-ruled Spain’s claim to a four-year statute of limitations on claims.