If you're thinking of selling a property in Spain, understanding capital gains tax (CGT) is essential - Especially when it comes to your tax residency status and whether the property is your primary residence or a second home.
For Non-Spanish Tax Residents
If you're *not* a tax resident in Spain (i.e., you spend less than 183 days a year in the country and your main fiscal interests are elsewhere), you are still liable to pay CGT when selling a Spanish property.
- Flat Capital Gains Tax Rate:
Non-residents pay a *19%* tax on the profit made from the sale (i.e., the difference between the sale price and the original purchase price, minus eligible expenses like renovations and agent fees).
- 3% Withholding Tax:
When a non-resident sells their property, the Spanish tax authorities *automatically withhold 3%* of the sale price to ensure taxes are paid. This amount is deducted at closing and must be declared in your tax return. If the actual tax due is less than 3%, you can claim a refund.
- No Exemptions for Primary Residence:
Unlike residents, non-residents *do not* qualify for exemptions related to reinvesting in another primary home
For Spanish Tax Residents
If you're a Spanish tax resident (you live in Spain more than 183 days a year), your CGT liability depends on how long you've owned the property, the profit made, and whether it’s your main residence.
a) Primary Residence (Main Home)
- Reinvestment Exemption:
If you sell your main home and *reinvest the full amount* into another primary residence in Spain or the EU within *2 years*, you may be *exempt from CGT*.
- Over 65s:
If you're over 65 and the property is your primary home, *you’re fully exempt* from CGT—no need to reinvest.
b) Second Homes / Investment Properties
- Progressive Capital Gains Tax Rates (2025):
- 19% on the first €6,000 of profit
- 21% from €6,001 to €50,000
- 23% from €50,001 to €200,000
- 27% from €200,001 to €300,000
- 28% over €300,000
- No reinvestment exemption applies to second homes or investment properties.
Navigating capital gains tax in Spain can feel complicated, especially with the different rules for residents and non-residents. That’s why having the right guidance matters. At Mitchell’s Prestige Properties, we don’t just help you buy or sell a home—we connect you with trusted legal and tax experts to ensure every step of your property journey is handled smoothly and transparently. With over 20 years of experience on the Costa del Sol, our team is here to give you peace of mind, so you can focus on enjoying your next chapter in Spain.