Selling your home, it’s all about timing!

Whether you are in the process of moving to Spain to live and selling your home outside of Spain, or already living in Spain and are thinking of selling your Spanish home, it’s very easy to get caught with an unnecessary capital gains tax bill from the Hacienda.  In this article I’m going to cover selling your home outside of Spain when you move to Spain, and also selling your home in Spain when you are at or near age 65.  Read on if you want to know how to minimise your tax liability in both those situations. 

Selling your home outside of Spain

Timing really is everything when planning your move to Spain in respect of avoiding unnecessary tax on the sale of your home.  The first thing to recognise is that the tax year in Spain runs from January to December, and is self certification, with your first tax return due anytime during May and June in the calendar year following your first year of tax residency in Spain.  Let’s consider two examples of a move to Spain during 2026 …

Scenario A – If you move to Spain in the first half of 2026, you will be considered tax resident in Spain for 2026, and your first residents tax return is due in 2027, for income and capital gains in the year 2026.

Scenario B - If you move to Spain in the second half of 2026, because you will complete less than 183 days living in Spain for that particular Spanish tax year, your first year tax resident in Spain will be 2027, with your first tax return due in 2028, for income and capital gains in the year 2027.

Why is this important when you are selling your main home outside of Spain?

As a tax resident of Spain, your Spanish address will be considered your main home by the Hacienda.  It doesn’t matter if you are renting or whether you have bought in Spain, your home address from the Hacienda’s perspective is your Spanish address.

If you then sell your home outside of Spain, this would be considered a second home and therefore capital gains tax will be due on the sale of that property, with NO TIME APORTIONMENT RELIEF GIVEN FOR THE YEARS IT WAS YOUR MAIN HOME.  Capital gains tax would be charged by the Hacienda on the full gain. 

For instance, if you bought the property in 1983 for £20,000, and sold it in your first year of tax residency in Spain for £200,000, you will pay capital gains tax on £180,000 … leaving you with a potential unnecessary tax bill of €46,322 (£40,280 @ 1.15 exchange rate).

How can this be avoided?

This is where the timing of the sale of your home outside of Spain is crucial.  To keep it very clean, with no wiggle room for the Hacienda to attempt to charge you, you may wish to consider selling your home outside of Spain in the tax year prior to your move.  Using the above examples, let’s consider the impact of the timing of a house sale…

Scenario A – If you move to Spain in the first half of 2026, you will be considered tax resident in Spain for 2026, and your first residents tax return is due in 2027, for income and capital gains in the year 2026.  If you sell your main home outside of Spain at any point during 2026 (even if you sold your home before you moved to Spain) you WILL be liable for capital gains tax on the sale.

Scenario B - If you move to Spain in the second half of 2026, because you will complete less than 183 days living in Spain for that particular Spanish tax year, your first year tax resident in Spain will be 2027, with your first tax return due in 2028, for income and capital gains in the year 2027.  In this scenario, if you sell your main home outside of Spain at any point during 2026 (even if you are living in Spain at that time) you WILL NOT be liable for capital gains tax on the sale.  This is because your first tax year in Spain is considered to be 2027.   However, to keep it very clean with no wiggle room, you may wish to consider, if at all possible, selling your main home outside of Spain during 2025!

Selling your main home IN SPAIN!

As people near retirement, a house move often becomes part of the plan.  Whether it’s downsizing, or moving near to a bus route, near to the coast, or nearer to relatives.  Sometimes a move to a home country due to health reasons or to be close to family also becomes necessary for some people.

The timing of selling your main home in Spain if you are nearing age 65 is important to consider if you want to avoid capital gains tax on the sale.  This is because if you or your partner (if you own in joint names) are age 65 or over and selling your main home, no capital gains tax is chargeable, irrespective of whether you buy another house in Spain or not. 

In the event of one of you reaching age 65 before the house is sold, their share of the sale proceeds is not chargeable to capital gains tax.

The rules around this are that you must have lived in the property for at least three years, and it must be your main home as a resident of Spain.

So be careful of the timing of the sale, and if you are close to reaching age 65, waiting until your birthday to sell could save you a lot of unnecessary tax!

Summary

Our aim is to ensure that you are able to enjoy life while we take care of your finances, ensuring you’re set up in the most tax efficient way for your particular circumstances.  If you are thinking about how best to navigate life in Spain, please do contact us, or book a free 30 minute consultation via our website.

Speed Financial Solutions are a highly qualified and regulated financial services provider looking after clients throughout Spain and the UK.  Established in 2010, we provide a discreet and comprehensive service to individuals, and our service is tailored to suit your needs taking advantage of tactical opportunities as they arise in respect of your financial planning.

Our Principal, Andrea Speed, is a qualified Discretionary Investment Manager specialising in Investment and Risk, Taxation and Trusts,  and a qualified Pension Specialist.  Andrea is also a Fellow of the Chartered Insurance Institute (CII), which is the world’s largest professional body for insurance and financial services in the world. 

Fellowship is the highest qualification awarded by the CII (Level 7) and is universally regarded as the premier qualification.  It is a major achievement in the financial industry and demonstrates the acquisition of skills and knowledge at the highest of levels.  Along with a Fellowship, Andrea is a CII Chartered Financial Planner.

Please take a look at our website – www.speedfinancialsolutions.com

For further information contact us on Tel 951 315 271 or 951 318 529

admin@speedfinancialsolutions.com

We are happy to discuss your own situation in more detail. One of our advisers would be pleased to spend some time with you either in your home or at our office to review your current savings, investments and pensions, so do call to make an appointment. Our Financial Review is completely free of charge and without obligation.  Follow us on Facebook for regular updates.

This communication is for information purposes only based on our understanding of current legislation and practices which is subject to change and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice form a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

Andrea J Speed FPFS (DM), M.A.

Principal, Fellow and Chartered Financial Planner

Speed Financial Solutions

30 September 2025