The new Spanish government voted in December 2011 a new set of measures in order to curb the overwhelming Spanish public deficit inherited from the previous administration. This was put into law with the “Real Decreto-ley 20/2011, de 30 de diciembre, de medidas urgentes en materia presupuestaria, tributaria y financiera para la corrección del déficit publico” (royal decree 20/2011 of the 30 December, of urgent budget, tax and financial measures for the correction of the public debt).
If you plan to sell or buy a property in Spain there will be few changes that will have to be taken into account:
Capital gain tax for non-residents
The “Impuesto sobre la ganancia patrimonial” (capital gain tax) is a tax on the profits obtained from the sale of assets purchased at a lower price. Assets could be any kind of financial products (like bonds, stocks or shares) or property, including art and real estate. During the period between the 1st January 2012 and 31st December 2013, capital gain tax for property transfer will increase.
For non-fiscal residents in Spain the capital gain tax will increase to 21% flat rate, from the previous 19%. Capital gain is calculated as the difference between the sale price and the inflation adjusted purchase value of the property (the adjustment is done by using the official coefficient tables from the Spanish Government). To this value the seller can deduct the adjusted cost of purchase and the expenses on the property, like renovations and works. This modifies Royal decree 5/2004 that set the taxation levels for non-residents in Spain.
When a non-resident sells a property in Spain there will be a preemptive retention from the tax authorities equivalent to 3% of the sale price. Because this amount is in general higher than that capital gain tax to be paid the seller can expect a refund from the Spanish tax authorities during the following fiscal year. There have been talks of increasing the retained percentage but for the time being the tax authorities left it a t 3%. In any case a non-resident must appoint a Spanish legal entity or Spanish resident individual as their Tax representative.
Capital gain tax for fiscal residents in Spain
There will be an increase as well for fiscal residents over 2012 and 2013 with a new progressive table:
- 21% for the portion between 0€ and 6000€ (increased from 19%)
- 25% for the portion between 6000€ and 24,000€ (increased from 21%)
- 27% for the portion above 24,000€ (increased from 21%)
Non-resident tax
Non-resident tax for owners of property in Spain will also face a minor increase in taxation – a 0,825% increase over previous years. Of course these increases will be reflected in the non-resident tax related to 2012 that will have to be presented in 2013.
Cadastral Tax (IBI “impuesto sobre bienes inmuebles”)
The IBI will see a general increase all over Spain. Depending on the type of property and when the town hall last updated the cadastral values, the increase will be ranging between 0% and 10%. Local administrations will be able to modify these rules.
Transfer Tax for resale properties
Transfer tax or in Spanish “Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados” is the responsibility of autonomous communities. Starting from January 2012 the Junta de Andalucia has increased transfer tax according to the following table:
For resale properties
| Imposable base bracket | Transfer tax rate |
| 0.00€ to 400,000.00€ | 8% |
| 400,000.01€ to 700,000.00 | 9% |
| 700,000.01 and above | 10% |
For resale of properties qualified as garages
| Imposable base bracket | Transfer tax rate |
| 0.00€ to 30,000.00€ | 8% |
| 30,000.01€ to 50,000.00 | 9% |
| 50,000.01 and above | 10% |
VAT for the purchase of new properties
Throughout 2012 the VAT for the purchase of new properties will stay at 4%. It is still unclear if this level will be increased or not in 2013. Analysts claim that these changes won’t have a major impact on the real estate market that it will remain a good ground for “bargain hunters”.
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