Expats who own property and work in Spain are having to contend with a range of new taxes in 2015.

New regulations in the Spanish budget for 2015 directly affect owners of Spanish property and businesses.

In particular, the Spanish Government has introduced a series of beneficial tax breaks for foreign investors. The capital gains rate will be reduced from 21% to 20% this year and to 19% in 2016.


There is also a substantial reduction in Inheritance Tax from 34% to 1% and 7% for transactions to immediate family such as a spouse and children.

However, property owners selling or gifting their property bought before 1994 will be required to pay more tax than previously as taper relief on capital gains tax from the disposal of a property has been abolished.

But you are exempt if you are over 65 years old and selling your main home or if you are under 65 and selling your main home to buy another main home in Spain.

‘Income tax has also changed with the top band reducing from 52% to 47 per cent and the lowest band reducing from 24.75% to 20% but with a reduction in the number of bands from seven to four. If you are a non-resident in Spain this only applies to income earned in Spain.

The Wealth Tax for those with assets in Spain valued at €700,000 has again been extended for a further year. This was first introduced in 1977 as a temporary tax but continued until 2008 when it was suspended only to be reintroduced in 2011 and extended each year.

In an effort to boost the economy, company tax is reduced from 30% to 28% in 2015 and will be reduced further to 25% in 2016. However, a new regulation abolishing rent control for commercial properties has been introduced.

‘Businesses have previously been protected as, for the last 20 years, rents have only been allowed to increase in line with inflation but from January 2015 market forces will apply for all rent reviews.

Also, IVA, the Spanish equivalent of VAT, doesn’t change in any way that would affect the majority of individuals.

‘The Spanish Government continues to face a difficult balancing act. However, it is being careful not to scare off British owners or potential buyers of property by reducing or maintaining certain taxes and by not introducing new initiatives aimed at this market in particular,’ said Peter Esders, commercial director of legal services company Judicare.