A capital gain arising from the sale of real estate is taxable income. The gain is deemed to accrue when the change in the taxpayer’s assets takes place.
A capital gain arising from the sale of real estate is taxable income. The gain is deemed to accrue when the change in the taxpayer’s assets takes place.
As a general rule, the gain is calculated as the difference between the transfer value and the acquisition value.
Gains accruing from 1 January 2015
The acquisition value consists of the actual amount paid to acquire the asset being transferred, plus the expenses and taxes inherent in the acquisition that were paid by the current transferor, excluding interest.
If the property being transferred was rented, the value calculated in this way must be reduced by the depreciation corresponding to the rental period.
The transfer value is the actual amount for which the disposal took place, less the expenses and taxes inherent in the transfer that were borne by the seller.
Gains accruing up to 31 December 2014
The acquisition value consists of the actual amount paid to acquire the property being transferred, plus the expenses and taxes inherent in the acquisition that were paid by the current transferor, excluding interest. Depending on the year of acquisition, this value is adjusted by applying coefficients updated annually in the State General Budget Act.
For assets transferred during 2014, the coefficients were:
| Year of acquisition | Coefficient |
|---|---|
| 1994 and earlier | 1.3299 |
| 1995 | 1.4050 |
| 1996 | 1.3569 |
| 1997 | 1.3299 |
| 1998 | 1.3041 |
| 1999 | 1.2807 |
| 2000 | 1.2560 |
| 2001 | 1.2314 |
| 2002 | 1.2072 |
| 2003 | 1.1836 |
| 2004 | 1.1604 |
| 2005 | 1.1376 |
| 2006 | 1.1152 |
| 2007 | 1.0934 |
| 2008 | 1.0720 |
| 2009 | 1.0510 |
| 2010 | 1.0406 |
| 2011 | 1.0303 |
| 2012 | 1.0201 |
| 2013 | 1.0100 |
However, where the investment was made on 31 December 1994, the coefficient 1.4050 applies.
A coefficient other than one may be applied only if the investment was made more than one year before the date on which the real estate is transferred.
If the property being transferred was rented, the value calculated in this way must be reduced by the depreciation corresponding to the rental period. This depreciation is also updated according to the year to which it relates.
The transfer value is the actual amount for which the disposal took place, less the expenses and taxes inherent in the transfer that were borne by the seller.
The difference between the transfer value and the acquisition value calculated as described above is the taxable gain.
However, if an individual acquired the property being transferred before 31 December 1994, the gain calculated above may be reduced under a transitional regime.
If the transferor acquired the property on two different dates, or if the property has been improved, the calculations must be made as if there were two separate gains.
Partial exemption
Fifty per cent of capital gains arising from the sale of urban real estate located in Spain is exempt where the property was acquired between 12 May 2012 and 31 December 2012.
This partial exemption does not apply:
- For individuals, if the property was acquired from or transferred to their spouse, a person related to the taxpayer by blood or marriage, in the direct or collateral line, up to and including the second degree, or an entity in respect of which any of the circumstances set out in Article 42 of the Commercial Code apply between it and the taxpayer or any of the persons mentioned above, irrespective of residence and of the obligation to prepare consolidated annual accounts.
- For entities, if the property was acquired from or transferred to a person or entity in respect of which any of the circumstances set out in Article 42 of the Commercial Code apply, irrespective of residence and of the obligation to prepare consolidated annual accounts, or to the spouse of that person or anyone related to them by blood or marriage, in the direct or collateral line, up to and including the second degree.
Exemption for reinvestment in a main home for taxpayers resident in the EU, Iceland and Norway (for gains accruing from 1 January 2015)
Taxpayers resident in an EU Member State or in a European Economic Area state with effective exchange of tax information may exclude from taxation the capital gain obtained on the transfer of their main home in Spain, provided that the full amount obtained from the transfer is reinvested in acquiring a new main home. If the amount reinvested is less than the total proceeds, only the proportion of the gain corresponding to the amount reinvested is excluded from taxation.
If reinvestment takes place before the filing deadline for Form 210, the whole or partial reinvestment may be taken into account when determining the tax liability. If reinvestment takes place later, an application must be filed using the form approved for this purpose within three months of acquiring the new main home, together with documents evidencing the transfer of the main home in Spain and the subsequent acquisition of the new main home.
Tax rates
| Accrual year | Tax rate |
|---|---|
| 2011 | 19% |
| 2012–2014 | 21% |
| 1 January–11 July 2015 | 20% |
| 12 July–31 December 2015 | 19.5% |
| 2016 | 19% |
The person acquiring the property, whether resident or non-resident, must withhold and pay to the Public Treasury 3% of the agreed consideration. For the seller, this withholding is a payment on account of the tax due on the gain arising from the transfer.
The buyer must therefore provide the non-resident seller with a copy of Form 211 (showing that the withholding has been paid), so that the seller can deduct it from the tax due on the gain reported. If the amount withheld exceeds the tax due, the excess may be refunded.
If the withholding is not paid, the property remains liable for the lower of the withholding amount and the tax due.
Tax return form
Form 210, approved by Order EHA/3316/2010 of 17 December, using income type 28. However, where the exemption for reinvestment in a main home applies, income type 33 or 34 must be entered, as applicable.
Filing methods:
- On paper, by printing the PDF generated after completing the form available on the Tax Agency’s website.
- Online.
If the property being transferred is jointly owned by a married couple who are both non-residents, exceptionally a single return may be filed.
Filing deadline
Three months from the end of the period allowed to the buyer to pay the withholding (that period is one month from the date of sale).
Refund of excess withholding
If there is a capital loss or the withholding exceeds the tax that should have been paid, the excess withholding may be refunded. The refund procedure begins when the tax return is filed.
The Administration may issue a provisional assessment within six months of the end of the filing period. If the return is filed late, the six-month period is counted from the filing date.
If no provisional assessment is issued within that period, the Tax Administration will refund the excess over the self-assessed tax, without prejudice to any subsequent assessments that may be appropriate. If six months elapse without the refund being paid for a reason not attributable to the taxpayer, the corresponding late-payment interest will be added to the amount pending refund.
