Capital Gains Tax When Selling Your Spanish Property as a Non-Resident

Catherine Hughes June 9, 2026 4 min read

Spanish Capital Gains Tax: The 19% Non-Resident Rate

When you sell Spanish property as a non-resident, Spain levies capital gains tax at a flat 19% rate on your profit. This applies whether you are UK, US, or any other nationality – the key factor is your Spanish tax residence status at the time of sale.

The gain calculation follows Spanish rules: sale price minus acquisition cost (including purchase price, improvement costs, and allowable expenses like notary fees and estate agent commissions). If you bought your Costa del Sol villa for €400,000 in 2018, spent €50,000 on renovations, and sell for €650,000 in 2024, your Spanish taxable gain is €200,000. At 19%, you owe €38,000 to Spanish tax authorities.

Spain operates a withholding system on property sales. The buyer’s lawyer typically retains 3% of the gross sale price and pays this directly to Hacienda as an advance payment against your final CGT liability. On a €650,000 sale, that means €19,500 held back. You then file Form 210 within the following tax year to calculate your actual liability and claim any refund due.

Double Taxation Relief: UK-Spain Tax Treaty Protection

UK tax residents selling Spanish property face potential double taxation – Spain’s 19% rate plus UK CGT on the same gain. The UK-Spain Double Taxation Agreement (Article 13) allocates taxing rights to Spain as the country where the property is located, but the UK still taxes worldwide gains for its residents.

Relief comes through the UK’s foreign tax credit system. You pay Spanish CGT first, then declare the gain on your UK Self Assessment. HMRC calculates UK CGT (at 18% or 28% depending on your total income and the property type) but gives you a credit for Spanish tax already paid. The practical result: you pay the higher of the two rates, not both in full.

Take a UK higher-rate taxpayer selling their Spanish holiday home with a £180,000 gain (using the sterling equivalent of our €200,000 example). Spanish CGT of £34,200 (19%) gets credited against UK CGT of £50,400 (28% residential rate). The UK resident pays £34,200 to Spain and an additional £16,200 to HMRC, for a total effective rate of 28%.

US Tax Residents: Form 8938 and FBAR Compliance

US citizens and residents face more complex reporting requirements when selling Spanish property. The Foreign Account Tax Compliance Act (FATCA) requires Form 8938 disclosure if your foreign financial assets exceed $50,000 (single filer) or $100,000 (joint filer) at year-end or $75,000/$150,000 at any point during the tax year.

Spanish property typically qualifies as a specified foreign financial asset, meaning the sale proceeds and any Spanish bank accounts holding funds trigger FATCA reporting. Additionally, if you hold more than $10,000 in foreign bank accounts (including Spanish accounts), you must file FinCEN Form 114 (FBAR) by 15th April following the tax year.

For US tax purposes, you report the capital gain in US dollars using the exchange rate on the sale date. Spanish CGT paid provides a foreign tax credit on Form 1116, similar to the UK system. However, US capital gains rates vary by income level and holding period – long-term rates range from 0% to 20% plus potential Net Investment Income Tax of 3.8% for high earners.

Corporate Ownership: Spanish SL vs Personal Holding

Some non-residents hold Spanish property through a Spanish limited company (Sociedad Limitada or SL) rather than personal ownership. This structure changes the tax treatment significantly. The SL pays Spanish corporate tax at 25% on any capital gain from property sales, not the 19% non-resident rate.

However, extracting proceeds from the SL to the non-resident owner typically triggers additional tax. Dividends to non-residents face 19% Spanish withholding tax, though double taxation treaties may reduce this rate (the UK-Spain treaty reduces it to 15% for substantial shareholders, 10% otherwise).

The all-in tax cost often exceeds direct personal ownership, particularly for UK residents who can claim dividend tax credits. US owners face different calculations due to the foreign tax credit limitations and potential controlled foreign corporation (CFC) rules if they own more than 50% of the SL.

Timing and Planning Considerations

Spanish CGT becomes due when you sign the escritura pública (completion deed), not when you exchange contracts. This timing can matter for cross-border tax planning, particularly if you are changing tax residence around the sale date.

UK residents moving to Spain should consider the timing carefully. If you become Spanish tax resident before the sale, you benefit from Spanish resident CGT rates (19% to 23% depending on the gain size) but lose access to UK principal residence relief if selling a former main home. Spanish residents get a €400,000 exemption when selling their main residence if they are over 65, but this rarely applies to non-resident holiday home sales.

Currency movements between contract exchange and completion can also affect your position. If sterling strengthens against the euro between purchase and sale, your UK tax gain (calculated in sterling) may exceed your Spanish tax gain (calculated in euros), creating additional UK tax liability beyond the Spanish credit.