The main issue with selling a property in Spain is the relatively large Capital Gains Tax(CGT). CGT in Spain applies to the profit of selling your home. The CGT levels are as follows:
- First €6,000: The CGT is at 19 percent
- €6,000–€50,000: The CGT is at 21 percent
- €50,000 or more: The CGT is at 23 percent
For example, if you purchase a property for €400,000 and sell it for €550,000 then you pay CGT on €150,000. Because of the tiered system, the tax will be €33,260.
Reductions on capital gains tax
There are a few cases where you may be able to claim a reduction on CGT to account for inflation:
- If you are buying another property in Spain
- If you are over 65 years of age and have lived in the property as your main residence for more than three years
Otherwise, you’ll have to pay CGT no matter how long you’ve lived on the property. Additionally, you have to pay regardless of your residence status. This means that you need to pay CGT even if you are no longer a resident in Spain.