This guide do not substitute professional advice, which we will be happy to provide on request.

A capital gain as a result of the sale of real estate property is subject to taxation. When a change in property takes place the income is considered due.
In general terms, a capital gain is determined by subtracting the purchase value from the sale value.
The purchase value is made up of the price paid for the property to which the amount of the expenses is to be added, excluding interest rates, and taxes related to the acquisition, , that have been paid by the present transferor.
If the property had been rented, the purchase value determined as mentioned before, must be reduced by the amortization corresponding to the rental period.

The sale value is the amount for which the transaction has been carried out, having deducted the amount of the expenses and taxes referring to the transfer which the vendor has been responsible for.

The difference between the sale value and the purchase value, so determined, will be the capital gain subjected to taxation at a flat rate of 20 %.

Nevertheless, if the property that is presently transferred had been acquired prior to December 31, 1994, the capital gain will be divided in two parts and special rules for calculation will be applied.

  If the individual who is selling the property had acquired it on two different dates or the property has been improved, the evaluation has to be undertaken as if they were two different capital gains, with different ownership periods for the application of the reduction coefficients and different up-to-date coefficients.

The person who purchases the property, even if he/ she is resident or not, is obliged to withhold and pay to the Treasury 3% of the agreed price. This payment is to be considered in the case of the vendor, as an advance payment of the tax corresponding to the transaction. Therefore, the purchaser has to forward to the non-resident vendor a copy of form 211 that has been used for the payment of the withholding in order for the vendor to be able to deduct this amount from the tax due to be paid, as a result of the assessment of the capital gain. If the amount withheld exceeds the tax due, the vendor may request a tax-refund.

   In case that the withholding is not paid, the property will be tax due.

Tax-refund of the excess withheld: In case of capital losses or in case that the withholding exceeds the tax due, it is your right to receive a tax refund of the excess withheld. The refund procedure starts with the presentation of an electronic online tax form. The refund will be forwarded by means of a bank transfer to the account stated in the return.