How to pay less tax on selling property in Spain in 2021

Paying less tax when selling property in Spain
Paying less tax when selling property in Spain / Pixabay

Springtime is almost upon us, it is once more the time of the year in which Mother Nature paints the countryside in bright yellow colours, animals are keen to display courtship behaviour, and humans drive estate agents nutty on looking for a brand-new home!

Ironically, one of the best times to reduce your sales tax is actually on buying property in Spain! I can imagine few buyers have sales tax on their minds, being more interested in other matters related to their purchase. However, the fact is that when you buy property, if you play your cards right, you can save yourself a great deal in taxes down the road, normally thousands of euros.

Unbeknownst to most buyers, several of the VAT invoices and transfer tax you pay on buying can be written off on selling the property years later. This action translates into mitigating your tax burden considerably on selling on. You should safely store all invoices and tax receipts on buying, as they will come in handy on selling.

With all this in mind, in today’s post we give a brief overview on how to reduce your capital gains tax on selling.

Expenses & taxes that can be written off

On selling property in Spain, your lawyer can write off a series of acquisition & sales related expenses that will greatly reduce the value of your property, for tax purposes. As a result of this, as on paper you are making less profit, you stand to pay considerably less tax on selling.

In fact, if done right, a non-resident seller is entitled to a 3% CGT tax rebate, plus legal interests. That's a great deal in taxes a company like Larrain Nesbitt Abogados can save you. The following list of VAT invoices and taxes can be offset from your CGT bill, drastically reducing your sales tax. You’re welcome.

1) On buying

  • Lawyer’s fees
  • Notary fees
  • Land Registry fees
  • Taxes

2) On selling

  • All property-related improvements (not maintenance costs) i.e., glass curtains, refitted kitchen, roof re-tiling, wood flooring, A/C installation, house alarm, etc.
  • Estate agent's commission
  • Lawyer’s fees 

At LNA we can assist you buying, selling or renting out your property in Spain. We have 18 years’ experience in conveyance & tax. We are also specialized in Immigration & Residency permits.

Larraín Nesbitt Abogados, small on fees, big on service.

2021 © Raymundo Larraín Nesbitt. All Rights Reserved.

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