Spanish Tax Laws

You become a tax resident in Spain if you spend more than 183 days in a calendar year (the same as the financial year) and pay tax on the entire year income if that happens.

If, for example, you become resident in Spain in April 2023 then sell your Irish property in, say, August 2023 then your will need to complete an income tax return including any profit on the property you sold in  Ireland you will be liable for income tax for the entire year. That return will be completed by June 2024 relating to 2023.

If, however, you become a resident in Spain in, say, September 2023 and then sell a property in Ireland in, say, November 2023 then you will not have to complete an income tax return for 2023 as you will not have been a fiscal (tax paying) resident for more than 183 days. Your first income tax return will be done by June 2025 for all income earned in 2024 which does not include the sale of your foreign property.

If you become a tax resident in that same September 2023 and sell your property in February 2024 then you will be taxed on it in your income tax return submitted in 2025 as you will have been a tax resident for more than 183 days in 2024 when you sold the house abroad.

Always pays to choose your dates of taking out residency and selling taxable items very carefully.

And as an Irish citizen, it makes no difference if you take out residency or not (you need to go on the register of foreign EU citizens resident in Spain) as the 183 days in that calendar year is what counts  You would need to prove you weren't here for 183 days or more but things like travel documents,  utility bills etc will point the way on that. It would be up to you to prove you weren't here for 183 days in one calendar year.

There is also the law of transfer of profit to be taken into account. If you have lived in your house in Ireland as your main home for more than 3 years and transfer the profits from the sale, including the profit, into a property that is going to be your main home in Spain then you pay no capital gains tax (this from any EU country to any EU country). If you only invest the money from the sale of your main home plus a part of the profit, then only the part of the profit is not liable to capital gains tax.

Oh, forgot to mention, the time you've been in Spain on holidays this year will count towards your 183 days officially as you are classed as a fiscal resident if you have been in Spain for more than 183 days in the calendar year. 

Thank you so much for your very thorough response. I must admit though I’m still confused! So my question is if we are buying a new property in Spain do we still have to pay tax on our residential property in the UK when we sell it? Seems ludicrous as we don’t pay tax in the UK when selling the residential home? 

Read this article from Up Sticks. https://upsticks.es/the-spanish-capital-gains-tax-trap/

So very helpful that article makes it much more clear. We may want to discuss further with you so we can plan our move properly so should I click on the link within the article to be able to speak to you? Thank you so much 

I think you may be mistaken. That article is not mine so if you click on the link it will go to the company doing the advertising. I posted it as it agrees with my points.

Now, that's the official and legal way. How it works in reality is, of course, very different. What we did (12 years ago when we'd owned property for several years as a holiday home) was sell in UK in December and then move over and take up residency (which was the register of EU nationals at the time) in January the following year. That way we did not have to declare anything in the year we sold.

Our solicitors didn't want to know anything from before we took out residency. Now, in the real world, you could either add the days you have already spent in Spain and then add them to the 183 days (which would be July 3rd). If you've spent 14 days already then that would take you up to July 17th. Move over after that and there would be no problem with the 183 days residency. What would really happen is that the time would only start ticking from when you went on the register. I doubt if, whoever you get to register you for tax purposes, would be interested in any date before you went on the register or took out residency.

The only drawback would be if the tax people in Spain got round to auditing you and they can go back four years. I would think the chances of that would be extremely unlikely so you could simply chance not registering your residency until later on as long as it's within 90 days of your arrival. Then you wouldn't have to complete a tax return for this year when you sold your property overseas.

Best of luck and hope you enjoy your new life here. Just don't fall into the trap of thinking things here work the same as UK. 

Totally understand this now and this is extremely helpful so thank you so much for making it very clear. All the best 😊