That’s an important question we have received so many times from foreign customers who are publishing their listings in our portal. It’s a pity, but you can easily imagine that the answer is always ‘YES’.
Let’s explain that a little bit.
There are two key taxes you will be involved: Income Tax (RENTA) and Capital Gain (Plusvalía). Both types of taxes must be paid. However, depending if you are a resident or not, you’ll pay in a different manner.
RESIDENT’S INCOM TAX
When you are a resident for tax purposes in Spain, you have to pay Income Tax in your annual income statement (Declaración de la Renta). The total amount of your sale’s price will be considered as an irregular income in your tax form. So, the tax you’ll be paying will depend on the rest of your income. Since there are so many factors that you can deduct, we would suggest to ask for advise from an attorney.
NON RESIDENT’S INCOM TAX
In such a case, there is a 3% withholding tax made automatically by the Notary at the signature’s day of the sale. That means that the Notary will keep that 3% of the sale’s price to deposit it in the Treasury account.
This withholding can be returned to the seller, only in the case that it is proven that the difference between the purchase price and the sale price has a negative balance for the seller. Once again, we would suggest to visit an attorney to start that procedure.
CAPITAL GAIN (PLUSVALÍA)
The capital gains tax is a municipal tax that is collected by local councils.
The Tax on the Increase in the Value of Urban Land (IIVTNU) – commonly known as the capital gains tax – taxes the increase in the value of real estate between the time of purchase and that of sale. It is also paid in the case of an inheritance or a donation.
However, to calculate it does not take into account the real value of the transactions of sale, but it is taken as a basis the cadastral value of the land and multiplied by a coefficient based on the years elapsed.
The Constitutional Court has declared the capital gains tax null if the property is sold for less money than it cost initially or for the same value without obtaining any benefit. The same court asks the legislator to modify this tax charged by the municipalities.
But, what’s the matter if you have already paid it?
The first step is to complain to the city council and only if it rejects the return go to the Courts of Administrative Contentious, according to consumer associations (OCU).
To demonstrate that there was a devaluation of the sold property, the deed of purchase of the property, the deed of sale and the proof of having paid the capital gain tax should be presented.
In a note, the OCU indicates that it has launched a campaign to facilitate the claim of this tax through its website and the free telephone number 900 90 29 56
For more questions, help in translation or any advice on how to proceed, you can consult our email account firstname.lastname@example.org