Blevins Franks’ Guide to taxes in Spain 2018

I’m grateful to Blevins Franks for providing their updated tax guide for anyone with financial interests in Spain. It can be read HERE, and anyone who needs international tax advice can contact BF’s Canaries adviser Paul Montague HERE.



  1. Author

    My husband and I are hoping to rent a house in The Canary Islands for an extended holiday to hopefully improve my ailing health. This may be for one or two years. My husband is self employed and works from home. I am also self employed with a very small income derived from mortgaged (negative equity) UK properties which I rent out. When we move, all of our income will continue to be derived from UK and will be paid into our UK bank accounts. We will both continue to pay UK tax. Is it OK to continue paying tax in UK as that is where all of our income comes from or will we have to change and pay tax in Spain?

  2. Author

    I’ve moved your post because it’s more appropriate here. I hope the above item will help. Just click through to BF’s guide for informed professional advice.
    The question really is less of where you physically pay tax as your status, and the type of tax return you make. If you are here for more than three months you will be deemed physically resident, and so need to register with the police and get a Certificado de Registro, and after six months, you will probably be deemed fiscally resident in Spain. You should get an accountant or gestor to advise you further.

  3. i am now resident on tenerife and need advise on how to juggle my pensions can you help.

  4. Author

    No, John, I’m afraid I can’t. You need to speak to a financial expert. Why not contact Blevins Franks directly on the link above?

  5. Can you please confirm that as of today – 5 June 2015 – as Spanish residents of more than 3 years and both over 65 years of age, that should we sell our only home which is here in Spain and decide to relocate to the UK that we would be exempt from any Capital Gains Tax on our property which we bought in August 2001.
    Many thanks.

  6. Hello Diane

    If you are over 65 and have been TAX resident here in Spain for the last three complete years, and the property that you may sell is your main home, then you can benefit from the over 65 allowance; meaning there is no CGT payable in Spain. Notice that I have highlighted the word TAX – having a residencia does not qualify you as a Spanish tax resident unless in addition, you have submitted physical tax returns to the Hacienda over the years.

  7. Author

    For those who don’t yet know, Paul Montague, whose reply to Diane is immediately above, is Blevins Franks international tax adviser in the Canaries. He very kindly agreed to provide the answer because, as I always say, tax queries need qualified advice from specialists. Paul’s contact details are HERE.

  8. Many thanks for this information which is very helpful. We have indeed been tax resident here in Spain for more than 3 years and have also completed the necessary tax returns.

  9. Paul Montgue – I wonder if you could help further please. I have been chatting with a friend who is also over 65, is in a similar position having been tax resident in Spain for many years and has completed tax returns. He is looking at downsizing and is wondering if the same is true if one stays in Spain rather than return to Blighty. Also what happens if you have more than one property ? I do appreciate his is getting quite specific but any guidance you can give would be much appreciated. Many thanks. Diane

  10. Author

    Diane, it might be best to get in touch with Paul directly – even though he’s likely to see this, I’m sure a direct email would be faster. His contact details are in the link I gave in my reply a few comments above.

  11. June 21 2015
    Dear Janet, We have lived in Spain for just over 4 years and we did not think
    we would have to pay Tax because we lost half of our money in the 2008 mess
    the Bankers made, and following recession. We now have to live on our State
    Pensions we also own our own home. I saw an item in one free papers saying
    we have to send Tax papers in by the end of June or you would get heavily fined
    we did and now they have Taxed us 650.00 Euro in total. Is this Correct ?

  12. Author

    I’m sorry, Lynn, I can’t answer tax questions, and couldn’t answer this even if I had much more detail. The best I can advise is that you contact whoever it was that submitted your tax return, or get in touch either with a qualified professional.

  13. Janet thought I had read here of a tax attracted by your final mortgage repayment. I had heard that it is best to repay the bulk of it and the following final repayment tax would be on a much lower sum. I have also emailed Paul Montague but thought if the advice is already here you could guide me to it. My local bank says there is no tax but I want to be sure before paying 50 000 euros.

  14. Author

    It’s not tax, as such. I can’t find it right now either, but it’s a “settlement” figure which banks charge as a percentage of the final amount being paid off. They charge it as just one more of the fees to which they consider themselves entitled, and it will be identified in your mortgage escritura. So, say that you have €100,000 left on your mortgage, and the settlement fee the bank imposes is 1%. The fee for paying off the mortgage would be €1,000. But if you make a large payment in of €99,000, and then a final payment to pay off the mortgage of €1,000, the bank’s fee would be 1% of €1,000, i.e. €10 …

  15. I came across this last year, Billy D. It seems that the banks are no longer allowed to charge 1%, the max now being .25%, BUT this only applies to mortgages taken out after a certain date (I think sometime in 2009). Unfortunately, my mortgage started a few months earlier than the specified date and I had to hand over the 1% to the Bank as I was selling the property and had to cancel the mortgage in full.

  16. As far as I’m aware the 1% (or whatever the contracted percentage is) surcharge on early repayment is made on every overpayment made to the mortgage or any other loan, regardless of whether it’s the final payment ot not. So nothing is gained by breaking up the early repayment, the €99,000 in Janet’s example would still attract the 1% surcharge.

  17. Hello, My husband and I are currently in the UK and plan to relocate to Spain in the near future. We have decided that, for a while anyway, we won’t buy a property there and will either put the proceeds of our UK house sale into savings in the UK ( I know that the interest on this will be taxable in Spain) or buy to let here. I believe that any rents from this will be taxed in the UK, as will my small government pension, but when calculating the tax on this, is our whole income taken into account when deciding how much tax is payable?

  18. Author

    As I always say, tax queries need specialist advice from specialists, and I am not a tax expert. I recommend tax queries to be put to a qualified professional.

  19. I know you have said you are not an accountant, but do you know when working on the “profit” calculation of Capital Gains whether the exchange rate used is as at the time of purchase or present day.
    Or, on purchase date of 2000 the rate Peseta v Euro would be used to calculate euro purchase price?
    Thanks, J Pollard

  20. Author

    All transactions are in Euros, and so no exchange rate can be applied between the Euro and foreign currencies. As to the peseta, if you purchased in 2,000, no conversion is necessary because Spain adopted the Euro in 1999. The peseta remained valid as currency – for cash transactions – until 2002, but for official purposes, it was no longer the currency after 1.1.1999.

  21. I am a uk person resident and working in Spain. Can the Spanish taxman tax the inheritance from my parents? About 200,000 £ total

  22. Author

    Assuming your inheritance would be in the UK, I don’t believe it would be subject to Spanish inheritance tax but you would become liable to declare it in Spain as part of your worldwide assets. Having said that, you need to confirm the situation with a qualified tax adviser – which I am not.

  23. I am a non resident property owner in Tenerife, would it be financially better to transfer the property to my children who are beneficiaries of my will and avoid inheritance tax, or is this also taxable at a similar rate.thank you for your attention.

  24. Author

    Please see THIS page … the tax is Impuesto sobre Sucesiones y Donaciones (ISD), i.e. the same tax whether what is being transferred is a gift from the living or a bequest from someone who’s died.

  25. Hi Janet,
    Is there a personal allowance that is taken off income for tax residents, as there is in Britain, or is all income taxed from the first Euro?

  26. Author

    Yes, tax residents have personal allowances, based on their situation (married, retired, etc), but as I always say, please check this with a qualified tax adviser. I am not able to give confirmed advice on tax matters.

  27. Thanks Janet, I’ll check it out now that I know there are allowances. I couldn’t see anywhere in the guide that it said so, so you’ve answered a concern of mine.

  28. Author

    Link is also in the Resources page.

  29. Alan, that tax is IGIC, the Canarian equivalent of VAT. It’s 7% here rather than 21% in La Peninsula. It’s levied on goods and services, the same as VAT. In normal times as a tourist big stores will allow you to buy goods tax free if you go through their hoops. There is no possibility that you are exempt from the tax on services. Think yourself lucky it’s only 7%, you just saved €1200 euros.

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