Capital Gains Tax in Spain for Expats — What You Need to Know

Whether you are a long-term Spanish resident thinking about selling your home, or a non-resident who owns a holiday property and is considering cashing in, capital gains tax (CGT) is a subject you cannot afford to overlook. Spain applies CGT to gains made on the sale of property and other assets — and the rules that apply to you depend heavily on whether you are a Spanish tax resident or not.

This guide explains the CGT framework in plain English, covering the rates, the key exemptions, the obligations for non-residents, and the practicalities of how to declare and pay. It is not a substitute for personalised professional advice — CGT calculations involve individual circumstances that only a qualified gestor or asesor fiscal can assess — but it will give you a solid understanding of the landscape before you begin.

What is Capital Gains Tax in Spain?

In Spain, capital gains are treated as ganancias patrimoniales — capital gains or wealth gains — and they form part of your annual income tax return (declaración de la renta). A capital gain arises when you sell an asset for more than its cost. The most common triggers for expats are:

• Selling a Spanish property (your main home, a second home, or an investment property)
• Selling shares, funds, or other investment assets held in Spain
• Selling a business or business assets
• Receiving capital distributions from Spanish investment vehicles

The gain is calculated as the difference between the sale price (net of allowable selling costs such as estate agent fees and legal costs) and the original acquisition cost (including all the taxes and fees you paid when you bought it — ITP, notary fees, land registry fees, etc.). This is an important point: because buying costs in Spain are significant (10–14% on top of the purchase price), these costs increase your acquisition cost and thus reduce your taxable gain.

It is worth noting that Spain does not apply indexation relief — unlike the old UK system which adjusted the original cost for inflation. Your gain in Spain is calculated in nominal euros without any adjustment for the time value of money.

CGT for Spanish Tax Residents

If you have been living in Spain for more than 183 days in a calendar year, you are almost certainly a Spanish tax resident for that year. As a resident, you are subject to Spanish income tax on your worldwide income, and capital gains are included in your annual tax return (IRPF — Impuesto sobre la Renta de las Personas Físicas).

Capital gains for residents are taxed as savings income (base del ahorro), which means they are taxed at the savings tax rates — separate from and lower than the general income tax rates that apply to employment income. The savings tax rates for 2026 are:

• 19% on the first €6,000 of capital gains
• 21% on gains between €6,000 and €50,000
• 23% on gains between €50,000 and €200,000
• 27% on gains above €200,000

These rates are the same regardless of whether the gain comes from selling a property, shares, or any other capital asset. The rates apply to the net gain — after deducting all allowable costs from both the purchase and the sale.

Capital gains are declared in your annual Spanish income tax return, which covers the previous calendar year and is filed in the spring (typically April–June). If you sell a property in 2026, the gain will be declared in the renta filed in spring 2027.

CGT for Non-Residents

If you own property in Spain but are not a Spanish tax resident — for example, you live in the UK but own a holiday home in the Costa del Sol — you are still liable for Spanish CGT when you sell that property. Non-residents declare and pay using the Modelo 210 non-resident income tax return, which must be filed separately from any UK tax obligations.

The CGT rate for non-residents is:

• 19% for individuals tax resident in an EU or EEA country (including the UK since Brexit — this was confirmed by Spanish courts, though the exact position should always be verified with a current adviser)
• 24% for individuals tax resident outside the EU/EEA

Non-residents do not have access to the progressive rate banding that residents enjoy — the flat rate applies to the entire gain. This means that for a very large gain, a non-resident may pay a higher effective rate than a resident would, but for smaller gains the difference is less significant.

The 3% Retention Rule

This is one of the most important — and most surprising — aspects of CGT for non-residents selling Spanish property. When a non-resident sells a Spanish property, Spanish law requires the buyer to withhold 3% of the agreed sale price and pay it directly to the AEAT (Spanish tax authority) within one month of completion.

This 3% is an advance payment against the seller's CGT liability. It is deducted from the amount the buyer pays to the seller at completion — effectively, the seller receives 97% of the agreed price at completion, with the remaining 3% going straight to the taxman.

After the sale, the non-resident seller must file a Modelo 210 within four months to declare the actual gain and calculate the actual tax owed:

• If the actual CGT is less than 3% of the sale price, the seller can claim a refund of the difference from the AEAT
• If the actual CGT is more than 3% of the sale price, the seller must pay the additional amount
• If the sale makes a loss, the seller can claim back the entire 3% retained

It is critical to file the Modelo 210 within the four-month window — failure to do so can result in the loss of refund rights and the imposition of interest and penalties. Always engage a gestor who specialises in non-resident tax to handle this.

Main Home Exemption — Reinvestment Relief

Spanish tax residents who sell their habitual home (vivienda habitual) can claim reinvestment relief (exención por reinversión en vivienda habitual), which exempts all or part of the gain from CGT — provided they meet certain conditions.

The key conditions are:

• The property sold must genuinely be your habitual residence — the place where you have lived for at least three years immediately before the sale (with some exceptions for work, health, or marriage)
• You must reinvest the total proceeds from the sale in a new habitual residence within two years before or after the sale date
• If you reinvest only part of the proceeds, you receive partial relief — proportionate to the amount reinvested

If you are planning to sell your Spanish home and buy another, timing the transactions carefully to stay within the two-year window is important. This is a situation where advance planning with a gestor can save you a very substantial tax bill.

This exemption is available only to Spanish tax residents. Non-residents cannot claim reinvestment relief, regardless of what they intend to do with the proceeds after the sale.

The Over-65 Exemption

Spain offers two valuable CGT exemptions specifically for residents aged 65 or over.

Sale of Habitual Home

If you are a Spanish tax resident aged 65 or over and you sell your habitual home, the entire gain is exempt from CGT — with no requirement to reinvest the proceeds. Unlike the reinvestment relief available to younger residents, there are no strings attached on what you do with the money. This is an extremely valuable exemption that can save a substantial amount for older expats who have owned their Spanish home for many years.

Renta Vitalicia (Life Annuity) Exemption

Residents aged 65 or over who sell any asset (not just their home) can also exempt the gain from CGT if they reinvest up to €240,000 of the proceeds in a qualifying renta vitalicia (life annuity) within six months of the sale date. The exemption is proportionate to the amount invested in the annuity relative to the total sale proceeds.

This is a complex area that requires careful financial planning — the qualifying annuity products have specific characteristics, and the six-month window is strict. Anyone considering this route should work with both a tax adviser and a financial planner who is familiar with Spanish pensions and annuity products.

How to Declare and Pay CGT in Spain

Spanish Tax Residents

Resident CGT is declared as part of the annual IRPF return, filed in spring of the year following the sale. Your gestor will include the gain in your declaración, calculate the tax, and submit it to the AEAT. If you use a gestor for your annual tax return (which most expats should), this process is handled routinely. You do not make a separate payment at the time of the sale — the tax is settled when you file your annual return.

Non-Resident Property Sellers

Non-residents must file Modelo 210 within four months of completion of the sale. Your Spanish gestor — or a specialist non-resident tax adviser — will calculate the actual gain, credit the 3% already retained by the buyer, and either submit the balance for payment or apply for a refund of the excess retention. Always retain all documentation from both the original purchase and the sale: original escritura, all invoices for buying costs, and all costs associated with the sale.

Why a Gestor is Essential

CGT in Spain is not a DIY exercise for most expats. The calculations involve understanding which costs are allowable deductions, correctly applying the relevant rate and exemptions, filing the correct forms within the correct deadlines, and — for non-residents — managing the retention and refund process. A qualified gestor who handles both resident and non-resident tax matters regularly is the right professional for this. See our full guide to gestores for more on finding a good one.

How Buildings Insurance Fits In

If you are selling a Spanish property that has a mortgage, your mortgage lender will typically require buildings insurance to remain in force until the sale completes and the mortgage is redeemed. Even without a mortgage, maintaining buildings insurance until the day the keys are handed over is essential — as the legal owner, you remain liable for any damage to or caused by the property until the escritura is signed before the notary.

At 247 Expat Insurance, we help expat property owners arrange the right home insurance for the duration of their ownership in Spain — whether they are resident or non-resident, whether they live in the property or rent it out. Our English-speaking team is available 7 days a week.