Spanish Capital Gains Tax Reduced

Legislation to reduce Capital Gains Tax for non-residents from 35% to 18% (and to increase it for residents from 15% to 18%) was approved by the Spanish Senate in October.

The new regulations also reduce the withholding tax provision that non-residents pay when selling property in Spain from 5% to 3%.

The new regulations come into force at the beginning of January 2007.

Any non-resident currently selling Spanish property should therefore look at the possibility of delaying the completion of their sale until January 2007 in order to benefit from these lower rates of tax.