Tax advantages for residents when buying Barcelona Property

Barcelona real estate Blog

Friday, 10 September 2010 00:00

When buying a Barcelona Property, you can become a resident and take advantage of several tax advantages.

Become exempt from capital gains tax

If you are a resident, you do not have to pay capital gains tax on the increase in the value of your property when you sell, under the following circumstances:

• If you are a resident over 65 and have been a resident for three years or more
• If you sell your property and make a property, then re-invest that money in another Spanish property

3 percent retention does not apply

Non residents must pay 3% of the total value of a property when purchasing to the Spanish tax authorities as a guarantee against Capital Gains Tax liability. This does not apply to residents.

Massive 95% reduction in inheritance tax

If you are an official resident, and you leave your property to your spouse or children who are also official residents, you benefit from a 95% reduction in inheritance tax, if you have held a permanent residence for 3 years or more, the property has been your official residence for 3 years or more, and the heirs do not sell the property within 10 years (5 years in some regions).

It is worth noting, that this reduction applies only to the first 120.000€, full tax is payable on any amount above this.

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