Spanish Fiscal reform 2015 and its impact on Capital Gain tax
In August 2014 the Spanish government approved an update of the Spanish fiscal system with extensive changes in the way income tax, company tax, VAT and non-resident taxation is calculated. The majority of these changes will enter into force on the 1st January 2015. While, in general, these reforms will result in lower tax rates, there are grey areas where the amount of taxation will increase. In particular the way capital gain tax is calculated will change dramatically, and in some cases it might be more advantages to sell in 2014 rather than to wait and to pay a higher capital gain tax in 2015. Each case will have to be analysed in detail.

Capital gain for a property sold in 2014
The algorithm presently used by the Spanish tax office to calculate capital gain, involves adding to the purchase price of the property all expenses related to the purchase. This includes for example Property transfer tax, notary fees, registry expenses and lawyer fees.
For property purchases after 1994, this value is then adjusted for inflation using a table from the Spanish tax office which is updated every year. For property purchases on or before 1994, a fixed the inflation coefficient of 1.3299 will be applied.
Capital gain is then calculated using:
Capital gain = (Sale price – expenses related to the sale) – (Purchase price + expenses related to the purchase) x inflation coefficient. Nevertheless if the property purchase was done before 1994, we can reduce the Capital gain by an “abatement coefficient” (that is the result of a law approved in 1996 and kept on a temporary base since 2006). Without going into the details of the calculation of this coefficient there will be a reduction of capital gain of approximately 80% for a property acquired in 1970 and 36% for a property acquired in 1990.
If the seller is non fiscal-resident the capital gain tax will be 21%.
If the seller is fiscal resident in Spain, the capital gain will be included in his yearly tax return and depending on the income, the capital gain taxation will be between 21% and 27% (except if the period between sale and purchase is less than a year and in this case the taxation will be between 24.75% and 52%)

Capital gain for a property sold in 2015 and 2016
If you sell your property in 2015 or 2016, the capital gain calculation will be done differently i.e without the inflation coefficient and the abatement coefficient.
Capital gain = ( Sale price – expenses related to the sale) – (Purchase price + expenses related to the purchase)
If the seller is non-resident the capital gain tax will be 20% for a sale in 2015 and 19% for a sale in 2016
If the seller is fiscal resident in Spain, the capital gain will be included in his yearly tax return and depending on the income; the capital gain taxation will be between 20% and 24% for 2015 and between 19% and 23% in 2016.

To sell or not to sell in 2014?
While on paper capital gain tax is “lower” in 2015 and 2016, the different way of calculating it makes things less clear. If you purchased the property just few years ago and you need to sell now, you might be better off in delaying the sale till 2015 (you will need to compare the difference in capital gain tax).
If instead you bought your property a while ago and in particular before 1994 the difference will be dramatic and possibly a quick sale in 2014 at a discounted sale price will be a better alternative.

Examples:
Case1: Non fiscal-resident seller
Property purchased in 01/01/2012 for 100,000€ and sold for 150,000€ in 2014 -> Capital gain tax = 10,077.90€.
Property purchased in 01/01/2012 for 100,000€ and sold for 150,000€ in 2015 -> Capital gain tax = 10,000€.
Case2: Non fiscal-resident seller
Property purchased in 01/01/2005 for 100,000€ and sold for 200,000€ in 2014 -> Capital gain tax = 18,110.40€.
Property purchased in 01/01/2005 for 100,000€ and sold for 200,000€ in 2015 -> Capital gain tax = 20,000€.
Case3: Non fiscal -resident seller
Property purchased in 01/01/1980 for 100,000€ and sold for 300,000€ in 2014 -> Capital gain tax = 8,961.47€.
Property purchased in 01/01/2005 for 100,000€ and sold for 300,000€ in 2015 -> Capital gain tax = 40,000€.