How is the sale of a property by a non-resident in Spain taxed?

Selling a property in Spain can be a complex procedure, especially for non-residents. When it comes to taxes, understanding the rules and regulations can be even more difficult. Taxes are paid throught the Income Statement Declaration of the year following the sale transaction. The Municipal capital gain should be paid during the thirty days which follow the property’s sale. The amount to pay depends on the municipality. If you are a non-resident planning to sell a property in Spain, it is essential to know how the sale will be taxed. In this blog we are going to talk about the Capital Gain Capital Gain which has to be paid to the Spanish Tax Agency.

There is a substantial distinction between the tax rate that residents and non-residents in Spain have to pay. Resident individuals and legal entities submit the Personal Income Tax (IRPF) declaration, while non-residents are taxed by submitting Model 210, which corresponds to the Non-Resident Income Tax (IRNR).

In all cases, it will be required to present the Income Tax Declaration, even when the person involved is not a Spanish citizen.

What should I do to declare the sale of a property in 2023 if I do not reside in Spain?

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In the case of a non-resident person, they must present the income statement in the year of the sale. The tax payable will vary depending on the profit obtained. The tax charges that a non-resident must face when selling a property will be different, however, they must present an income tax declaration by all means.

When a non-resident owner sells a property in Spain, the buyer must with hold 3% of the final value at which the property has been sold and so, at the time the deed is signed. This withholding must be entered in the Treasury through model 211, within 30 calendar days from the date of the transaction. This procedure is carried out by the Notary where the signing of the sale is made. On the other hand, the non-resident seller will have to calculate the capital gain and pay 19% if their permanent residence is within the European Union (or 24% if the country of residence is outside the European Union) of the resulting amount, the 3% should be deducted.

Capital gain tax.

When it comes to selling a property in Spain, non-residents should be aware of Capital Gains Tax. These taxes concern  the profit obtained from the sale of the property, calculated by subtracting the purchase price from the sale price. For EU citizens, the tax  rate is 19%, while non-EU citizens are subject to a 24% tax. This tax must be paid within 30 days of the completion of the sale, or the seller may be liable for penalties and interest charges. 

When calculating the amount of tax due, it is possible to deduct certain expenses related to the sale of the property as long as the non-resident seller comes from an EU country. This can include the costs of refurbishment and improvements, as well as estate agent fees, notary fees and taxes paid to local authorities. In addition, some non-residents can take advantage of a tax agreement between their country of origin and Spain to claim a credit for the income tax paid. Therefore, it is essential to seek professional advice to ensure the best possible outcome.

Tax advice for non-residents

When it comes to the sale of a property in Spain by non-residents from non-European Union countries, it is essential to obtain professional tax advice. Tax laws and regulations can be complex and vary from country to country, so consulting with a specialist in Spanish tax law can make compliance easier and avoid penalties. In addition, an adviser can provide information on possible tax advantages or exemptions available to non-residents.

At  Equinox Urban Housing you will find the necessary advice, either for the valuation of your property or for professional support throughout the buying or selling process.

Would you like to know more? Feel free to contact us. We are looking forward to serving you.