By Rafael Guerrero - Tax Lawyer
If you have recently moved to Spain and are considering selling your former primary residence, it is important to understand the tax implications.
Do I Need to Pay Capital Gains Tax If I Sell My Property in the Same Year I Move to Spain?
You will only be required to declare and pay capital gains tax if you are considered a tax resident in Spain for that year. You will be deemed a tax resident if you spend more than 183 days in Spain within the year or if Spain becomes the main centre of your economic or vital interests.
How Do I Declare This Capital Gain?
Capital gains should be reported in your annual tax return, which must be filed between April and June of the following year.
Will I Be Taxed on the Sale of My Former Primary Residence?
If the property you are selling was your primary residence, you may be exempt from capital gains tax, provided you meet the following conditions:
The property has been your main residence for at least three years before the sale.
You reinvest the proceeds into a new primary residence in Spain within the specified timeframe.
Are There Any Exemptions?
Yes, individuals aged 65 or older are exempt from capital gains tax on the sale of their primary residence, regardless of whether they reinvest the proceeds into a new home in Spain.
For UK citizens aged 65 or older, the exemption still applies as long as the property sold was their primary residence for at least three years before the sale. Spanish tax law does not distinguish between Spanish nationals and other residents in this regard.
How Long Do I Have to Reinvest in a New Primary Residence?
You have up to two years to reinvest the proceeds from the sale into a new primary residence in Spain to qualify for the exemption.
What Happens If I Sell the Property After Living in Spain for More Than One Year?
If you sell your former primary residence after residing in Spain for over a year, you will no longer qualify for the main residence exemption. The capital gain will be taxed as if it were a non-primary residence sale.
How Much Will I Pay in Capital Gains Tax?
The tax rate on capital gains varies based on total annual income. The savings tax rates for 2024 are as follows:
Taxable Base (€) | Initial Tax (€) | Remaining Balance (€) | Tax Rate (%) |
0 - 6,000 | 0 | 6,000 | 19% |
6,000 - 50,000 | 1,140 | 44,000 | 21% |
50,000 - 200,000 | 10,380 | 150,000 | 23% |
200,000 - 300,000 | 44,800 | 100,000 | 27% |
300,000+ | 71,800 | - | 28% |
If you need assistance with your specific tax situation or a capital gains tax simulation, please contact our tax advisory department.
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