What Is Capital Gains Tax?
Capital Gains Tax is calculated on the profit made from the sale of your property—the difference between the purchase price and the sale price, adjusted for allowable costs and improvements.
Capital Gains Tax for Spanish Residents
Spanish residents pay CGT at progressive rates based on the level of profit made. The tax is declared through your annual income tax return (IRPF).
Certain exemptions may apply. Residents over 65 selling their main residence are exempt from CGT. Reinvestment relief is available if you reinvest proceeds into a new primary residence within two years, subject to specific conditions.
Capital Gains Tax for Non-Resident Sellers
Non-resident sellers are subject to a 3% withholding (retención) at the time of sale. The buyer retains this amount from the sale price and pays it directly to the Spanish tax authorities on your behalf.
Correct filing is essential to recover any overpaid tax. Many non-residents are entitled to refunds because the 3% retention often exceeds their actual CGT liability.
Allowable Deductions and Costs
Certain costs can be deducted from the gain, reducing the amount of CGT payable. Keeping invoices and receipts is essential to support your deductions.
Note: Regular maintenance and repairs are not deductible—only capital improvements that increase the property's value, such as extensions, new installations, or major renovations.
When and How CGT Is Paid
Capital Gains Tax must be declared within specific deadlines following completion. Late filings may result in penalties or interest charges.
Professional advice helps ensure deadlines are met and calculations are correct. A Spanish tax advisor can handle the filing process and maximise your allowable deductions.