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Spanish Capital Gains Tax for Non-Residents 2016

Find out what taxes you’re liable to pay when you sell your Spanish property as a non-resident.

As a non-resident of Spain when you sell your Spanish property you are obliged to pay capital gains tax. Capital gains tax is applied to the difference between the original purchase price of the property (the acquisition value) and the sale price (the transfer value).

The acquisition value: the amount you paid for the property including any expenses and tributes you paid resulting from the purchase but not including any interest charges from these.

If the property has been rented at some point since you bought it then the value is depreciated according to the corresponding values for the period in which it was rented out.

The transfer value: the amount you sell the property for minus the expenses and taxes linked to the sale and paid by the vendor (you).

Income from Capital Gains up to 31 December 2014

You may well be aware that previous to 2014 there were updating coefficients. These in effect increased the purchase price of a property based on when it was bought in an attempt to bring the purchase price in line with inflation. This reduced the amount of tax due as the original value of the property was increased, thus the taxable difference between the acquisition and transfer values was reduced.

The original purchase price was multiplied by the coefficient corresponding to the year it was bought to calculate the real value of the property at the time of purchase taking into account the rising cost of living. The coefficients are listed in the table below:

Year of Purchase

Coefficient

 

1994 and before

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

 

1,3299

1,4050

1,3569

1,3299

1,3041

1,2807

1,2560

1,2314

1,2072

1,1836

1,1604

1,1376

1,1152

1,0934

1,0720

1,0510

1,0406

1,0303

1,0201

1,0100

 

Important: these coefficients were abolished with Spain’s recent tax reforms. The current capital gains taxes are now as follows:

Income from Capital Gains from 1 January 2015

You are taxed on the difference between the purchase price (with no adjustment made for inflation) and the sale price at the following rates:

Spanish Capital Gains Tax Rates for Non-Residents

Year

2011

2012-2014

2015

2016

Tax Rate

19%

21%

Up to 11-07-15:

20%

From 12-07-25:

19.5%

19%

3% Withheld Tax on Spanish Property Sales Applicable to Non-Residents

When you sell your Spanish property as a non-resident, the buyer (whether resident or non-resident) is required to withhold 3% of the purchase price and pay it directly to the Spanish tax authorities. This tax withheld functions as an advance payment of the capital gains tax payable by you, the vendor. If the 3% retained is higher than the amount of capital gains tax due, the Spanish tax authorities refund you the difference. If the capital gains due exceeds the tax withheld, you must pay the difference. As the vendor you must file a Spanish tax declaration on the transaction within 4 months of the completion date.

Paperwork

The buyer gives you, the non-resident vendor, a copy of the 211 tax form with which they have paid the 3% retention.

Tax Exemption for Reinvestment in the Main Home

There is a tax exemption for reinvestment in the main home for taxpayers from the EU, Iceland and Norway, applicable only to property sales from 1 January 2015.

If you’re a resident of a member state of the EU or the European Economic Space with a two-way exchange of tax information with Spain, you can be exempt from capital gains tax when you sell your property in Spain providing all the following conditions are met:

  • The property is your main residence in Spain.
  • The total amount gained from the sale is reinvested in the purchase of a new main residence.

When the amount reinvested is lower than the total amount received from the property sale, only the amount reinvested in the new property will be exempt from capital gains tax.

Paperwork

Form 210 (income type 28). However, when you are applying for the exemption resulting from reinvestment in a main residence the income type will be 33 or 34.

When the property concerned is of shared ownership by a married couple in which both partners are non-residents, a sole declaration can be made.

Spain’s Plusvalía Tax on the Transfer of Property

What is the plusvalía tax?

The plusvalía tax is charged when a property is transferred from one owner to another, whether by inheritance or through sale. It is a local tax levied on the increase of the value of the land upon which the property is built calculated according to the amount of time that’s passed since the property last changed hands. This is not the same as capital gains tax and it must be paid in addition to capital gains tax. Each local authority applies their own plusvalía tax rate, which can vary widely from one autonomous community to another.

Who is liable to pay the plusvalía tax?

When a property is sold it is usually the responsibility of the vendor to pay the plusvalía tax, although this is negotiable and who pays it often depends on the strength of the market as to whether the buyer or seller has the upper hand in negotiations. If the property is being transferred as a gift or an inheritance it is the recipient of the property who is liable to pay the plusvalía tax.

When is the plusvalía tax due?

The plusvalía tax is due within 30 days of the sale of a property. In the case of an inheritance or a gift it is due within 6 months of the passing of the deceased or the legal bestowing of the gift by the benefactor.

Contact Us

Are you a non-resident in Spain looking to sell Spanish property? Contact us to enquire about our tax and conveyancing services.

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Non-resident Income Tax in Spain 2016

Are you a non-resident in Spain? Do you know what your tax obligations are? Andalucía Lawyers gives an outline of some different taxes you need to be aware of as a non-resident in Spain.

Am I a Spanish resident?

According to Spanish law you are a Spanish tax resident under the following circumstances:

  • You live more than 183 calendar days a year on Spanish territory.
  • The principal centre or base of your economic interests is in Spain.
  • Your centre of vital interest is in Spain i.e. your spouse or dependent minor children live in Spain.

If none of these apply to you then you are a non-resident of Spain. The Spanish tax system operates through self-assessment. Both residents and non-residents with property in Spain are obliged to file tax returns. Read on to find out what non-resident income taxes are applicable to your situation.

Non–Resident Personal Income Tax 2016

In Spain, non-residents are taxed on their gross Spanish source income and on capital gains arising from assets located in Spain. However, non-residents may also be taxed on deemed income in certain cases.

Non-residents in Spain are required to declare income earned in Spain at a general rate of 24%. If you are resident of an EU member state or EEA country with an effective exchange of tax information with Spain you’ll be charged Spanish income tax at a rate of 19% for 2016.

Non-resident Spanish Property Owners

If you are a non-resident but you own property in Spain you will be subject to the following Spanish taxes:

Non-Resident Property Tax (Impuesto sobre la Renta de no Residentes)

When a property is owned by more than one person each one of them is considered an independent taxpayer and must present a separate tax return. Depending on the use of the property, the applicable income taxes are:

Income Tax on Properties for Private Use

This is calculated from the property’s cadastral value (valor catastral). All properties in Spain are registered on a census and assigned a cadastral value. From 2015 onwards, the income tax on properties for private use is 2% of the cadastral value, of which you are charged a percentage (see table below).

Year

2011

2012-2014

2015

2016

Tax rate

24%

24.75%

Residents of the EU, Iceland and Norway

Residents of other countries  

Residents of the EU, Iceland and Norway

Residents of other countries

Until

11-07-15:

20%

From

12-07-15:

19.5%

24%

19%

24%

 

This is an annual tax calculated according to the calendar year (1 January – 31 December). If you’ve not been the owner of the property during the whole year or if the property was rented out for some portion of the year then you will only pay income tax proportionate to the time period in which the property was yours for private use only.

Paperwork

Form 210 (income type 02). Payable throughout the year.

Income Tax on Rented Property

If you’re a non-resident and you rent your Spanish property then you are obliged to declare the total amount of rent you receive without deducting expenses. However, if you are a member of an EU state, Iceland or Norway then from 1 January 2015 in order to calculate the tax base you can deduct allowed expenses directly related to your rental income as established in the Ley del Impuesto sobre la Renta de Personas Físicas.

You will be required to pay tax on rental income at the following rates:

Year

2011

2012-2014

2015

2016

Tax rate

24%

24.75%

Residents of the EU, Iceland and Norway

Residents of other countries

Residents of the EU, Iceland and Norway

Residents of other countries

Until

11-07-15:

20%

From

12-07-15:

19.5%

24%

19%

24%

 

Rental tax is declared and paid quarterly between the following dates. You pay tax on income earned during the 3 month period previous to the declaration:

  • 1 – 20 April
  • 1 – 20 July
  • 1 – 20 October
  • 1 – 20 January

If the tax return shows that you are owed money by the state, this is paid back to you from 1 February of the year following the date of the declared income and within a period of 4 years from the end of the declaration period concerned.

Paperwork

Form 210 (income type 01): to declare one source of rental income or several sources of rental income during a set period.

Taxes on Selling your Spanish Property as a Non-Resident

To find out about taxes applicable to non-residents who sell their Spanish property, such as Spanish capital gains tax and the plusvalía tax, please read our article Spanish Capital Gains Tax for Non-residents 2016.

Spanish Council Tax (IBI) for Non-Residents

Read our article outlining Spanish council tax for resident and non-resident owners of Spanish property.

Spanish Wealth Tax for Non-Residents

Read our article about Spanish wealth tax for residents and non-residents.

Contact Us

Are you a non-resident in Spain and you need help with your taxes? Contact us!

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Spanish Income Tax Rates 2015-2016 (RENTA 2016)

Andalucía Lawyers’ guide to Spanish income tax for Spanish residents. Find out about the Spanish RENTA: what it is, how it affects you and how to declare your income tax in Spain.

Am I a Spanish resident?

Individuals become officially resident in Spain for tax purposes if they live more than 183 days of the calendar year on Spanish territory or if the principal centre of activity or physical base of their economic interests is in Spain.

For more detailed information on how tax residency is established or if you are unsure about whether or not you are a Spanish resident, read our article How Do I Know if I’m a Spanish Resident or Non-resident for Tax Purposes?

What is the RENTA?

The IRPF (Impuesto sobre la Renta de Personas Físicas) is Spain’s nearest equivalent to personal income tax. Every year, Spanish residents have from 1 May to 30 June to declare their annual income from the previous calendar year – this is called the RENTA.

Must I declare the RENTA?

You are only exempt from declaring if your income falls below these established thresholds:

  • You earn a sole income of €22,000 as an employee already subject to employer deductions.
  • You can benefit from a reduced limit if your income is earned from more than one employer and is under €12,000.
  • Your bank interest and other investment income is under €1,600.
  • Your rental income is under €1,000.
  • You receive income from employment, investment capital, economic activities or capital gains up to a combined limit of €1,000 annually or you have capital losses below €500.

However, please note that it’s obligatory to make a declaration in the first year of your tax residency in Spain. Therefore, if you became a Spanish tax resident in 2016 you must file the RENTA 2016 income tax declaration between 1 May and 30 June 2017 no matter what your income level as

What earnings do I have to declare?

As a Spanish resident you are taxed on your worldwide income therefore you have to declare all earnings, regardless of where they come from. This includes pensions from your home country (with the exception of some civil service pensions). These rules apply even if your income is not paid into a Spanish bank account. A deduction for double taxation is applicable to all earnings that are taxed abroad thanks to Spain’s double taxation treaties with other countries. As a result you will not be taxed twice on the same income.

How do I register for tax in Spain?

First you will need to get your NIE (foreigner’s identity card) from the local foreigners’ office (Oficina de Extranjeros) or police station. You must notify the tax authorities in your home country that you have moved to Spain and register for tax in Spain with the Spanish tax authorities (Agencia Tributaria) using tax form 030. Our fees to complete form 030 for you are €50 plus VAT (21%) per person:

SPANISH TAX REGISTRATION SERVICE
€50 + VAT 
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What are the Spanish income tax allowances and deductions?

Various tax allowances and deductions are available for Spanish residents according to the individual’s personal situation. Tax rates were reduced for 2015-2016 as part of Spain’s tax reform aiming to simplify the system. Allowances and deductions were increased, especially for those in the low income bracket or with several dependents. Below we have listed some of the Spanish income tax allowances and deductions, please contact us if you’d like to consult with us about your particular situation.

Personal Allowance

  • Individual: €5,550.
  • 65 years old and upwards: €6,700.
  • 75 years old and upwards: €8,100.

Married Couple Allowance

  • Individual allowance of €5,550 for the first spouse and €3,400 for the second spouse in a joint return.

Married couples can make a joint return or declare separately. The tax implications of this decision can be very significant so you should calculate the best option for your situation. Contact us if you’d like us to help you with that.

Disability Allowance

Calculated according to a graded scale of disability:

  • Grades 33-65: €3,000.
  • Grades 65-100: €9,000.
  • An additional allowance of €3,000 if third party care is needed.

Child Allowance (Under 25 years Old)

Child allowance for under 25s with an income below €8,000 living at home with you:

  • First child: €2,400.
  • Second child: €2,700.
  • Third child: €4,000.
  • Each additional child: €4,500.

Child Allowance (Under 3 Years Old)

  • For each child under 3 years old: €2,800.

Dependent Relative Allowance

Applicable if a parent or grandparent with an income under €8,000 lives with you:

  • Over 65s: €1,150.
  • Over 75s: €2,550.

Dividends

  • The exemption on the first €1,500 of dividends no longer exists.
  • The exemption on up to €12,000 of equity income remains under certain circumstances.

Rental Income

  • The 100% deduction for rental income from young tenants has been withdrawn.
  • All landlords will now be taxed on 40% of net rent income – this includes any lettings income from outside Spain but not short-term holiday lets.

Deductions

You can claim deductions for:

  • Payments into the Spanish social security system.
  • Pension contributions.
  • The costs of buying and/or extending your main residence.
  • Charitable donations.
  • Some deductions applied by local governments – these vary from region to region.

What are the Spanish tax rates applicable for 2015-2016?

For tax purposes your income is divided into general income (renta general) and savings income (renta del ahorro). The total of the two produces the taxable base (base imponible). Once any allowances or deductions have been applied to this, the resulting figure is the net taxable base (base liquidable).

Differences Between Spanish State and Regional Tax Bands and Rates

It is important to be aware that tax rates in Spain vary from one autonomous community to another. The State sets its income bands and respective tax rates, but since 2011 each autonomous government has been permitted to set its own bands and rates. Consequently, the final tax bands and rates affecting tax payers in each autonomous region are calculated from a combination of the two. Which rates apply to you will depend on the region in which you are a resident.

Spanish General Income Tax Rates 2015-2016

Below are the State bands and rates applied to general taxable income. As a Spanish resident you are taxed on your worldwide general income. This includes anything that doesn’t fall into the savings category i.e. all your earned income such as your salary, income gained from self-employment, your pension, rental income, royalties, imputed income and income not resulting from the sale or transfer of assets e.g. gambling.

Income band 2015 2016 
Up to €12,450 19.5% 19%
€12,450-€20,200 24.5% 24%
€20,200-€35,200 30.5% 30%
€35,200-€60,000 38.5% 37%
Over €60,000 46% 45%

 

As stated above, it is important you check the particular rates for the region of your fiscal residence as they can vary from the State rates. For example, here are the 2015 general income tax rates for Andalusia, calculated from the state and local rates:

Andalucía State Region Total 2015
€0-€12,450 9.5% 12% 21.5%
€12,450-€17,707.20 12% 12% 24%
€17,707.20-€20,200 12% 14% 26%
€20,200-€33,007.20 15% 14% 29%
€33,007.20-€35,200 15% 18.5% 33.5%
€35,200-€53,407.20 18.5% 18.5% 37%
€53,407.20-€60,000 18.5% 21.5% 40%
€60,000-€120,000 22.5% 23.5% 46%
Over €120,000 22.5% 25.5% 48%

Spanish Savings Income Tax Rates 2015-2016

As a Spanish resident you are taxed on your worldwide savings income. This includes any income from interest, dividends, life insurance, purchased annuities and capital gains on the sale or transfer of assets.

Income band 2015 2016 
Up to €6,000 19.5% 19%
€6,000-€50,000 21.5% 21%
Over €50,000 23.5% 23%

Submit your Spanish Income Tax Return for 2016 (RENTA 2016)

Don’t forget to submit your tax return for the 2016 calendar year during May and June of 2017 – the deadline to present your RENTA 2016 declaration is 30 June 2017. If you would like advice about your tax situation or you’d like us to take care of your Spanish income tax return on your behalf, please get in touch.

Our Services

We offer a resident tax advice service for a set annual fee:

RESIDENT

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