CGT is paid by residents in Spain on their worldwide assets and by non-residents on property that they own in Spain.
The taxable item is the profit (gain) you make on selling an asset. Basically the taxable profit is the difference between the transfer value and the acquisition value.
Tax rate 2017 for Residents of EU, Iceland and Norway is 19% and 24 % for all others.
A seller can mitigate, within legality, the profit figure on selling to reduce his capital gains tax liability taking into account all the expenses incurred on buying and selling the property such as solicitor fees, Notary & Land Registry fees, VAT, Transfer tax, Stamp duty, Plusvalia tax and estate agent commissions. Also, some extensions or improvements done to a property can be deducted, such as glass curtains, double-glazed windows, swimming pool, etc.
Non-Residents: 3% Withholding Retention on Selling
In order to ensure the compliance of non-resident tax liabilities, buyers are forced –under law- to make a retention of 3% of the agreed sales price on the sale completion and to pay it into the Spanish Tax Office (AEAT).
AEAT will check your purchase and sale transactions and the fees and outlays involved in both transactions.
Providing that a seller has no profit or this is lower than the retained amount, the seller is entitled to a tax rebate.
A refund takes several months (twelve to eighteen), a number of contacts to the Tax Office and compliance with tax form (211 from the buyer and 210 for the seller) so, for sure a seller will require to be assisted by a solicitor to claim back the retained money.
On the contrary, if the profit exceeds the 3% retention, a non-resident will be expected to pay the remainder within three months from the sale.
Initially 3% withholding retention on selling does not apply to residents, but they must prove they are resident for tax purposes. Accordingly a fiscal certificate must be applied for the seller. That kind of certificate requires to provide the tax office with some additional paperwork, which is usually dealt with by a solicitor.
Residents over 65 are CGT exempt on selling their family home (vivienda habitual) provided they were living permanently in the dwelling.
Above mentioned rule also applies to residents under 65 if the sales proceeds are reinvested in acquiring a new main home (in Spain or else in the EU). Any part of the sales proceeds not reinvested will be taxed pro rata.