Spanish tax issues.

Spanish tax issues.


Your tax obligation as a Non-Resident is:


1. Income Tax (Renta) on Spanish income, without allowances, and on the own use of your property, based on the rateable value (see Owning a Property).

2. Wealth Tax (Patrimonio), based on the Escritura value of your property in Spain with no allowances.

3. Capital Gains Tax at a rate of 35% of net profit. Gains from assets held for less than one year are treated as income tax and taxed accordingly.
If selling a property, 5% of the new declared Escritura value will need to be deposited with the Hacienda as an advance payment of any Capital Gains Tax on the sale. Any refund will need to be applied for and can take up to two years to be repaid. Non-residents cannot roll-over the gain into a new home.

4. Succession Tax (Inheritance or Gift Tax) on Spanish property.

Your tax obligation as a Resident is:

1. Income Tax (Renta) on all income received worldwide, with allowances.

2. Wealth Tax (Patrimonio) on property, with allowances.

3. Capital Gains Tax at a rate of 15% of net profit. Gains from assets held for less than one year are treated as income tax and taxed accordingly. For property, there is up to 100% roll-over relief on your main residence if the gain is re-invested in the new main residence within two years of the sale. If only half the gain is re-invested, then half is taxable. If you are 65 years or over and have lived in your main residence for over three years and are Spanish tax-resident, the gain is tax-free and there is no need to buy a new property to claim roll-over.

4. Succession Tax (Inheritance or Gift Tax) on worldwide inheritance or gifts, with some allowances.