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Capital Gains Tax for non-residents reduced from 35% to 18%

Spanish property sales tax for non residents is to be reduced. Legislation to reduce Capital Gains Tax for non-residents from 35% to 18% plus increase it for residents from 15% to 18% was approved by the Spanish Senate in October 2006. The new regulations also reduce from 5% to 3% the withholding provision that non-residents pay when selling property in Spain. The new regulations come into force at the beginning of January 2007. Non-resident property sellers should try to delay completion of their property sale until January 2007 to benefit from these lower taxes.

The change was introduced after growing pressure from the European Union to treat non residents equally.

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