Capital Gains Tax

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This topic contains 26 replies, has 7 voices, and was last updated by Profile photo of katy katy 11 years, 1 month ago.

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  • #51239
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    Anonymous
    Participant

    We have owned a small townhouse in Spain for 5 years as non-residents and are now thinking of selling this house and using the proceeds to buy another in mainland Spain or Mallorca. I have tried various sources (our Spanish lawyer, estate agents in Spain etc) to try to find out whether we have to pay Capital Gains (if so, how much) on the sale when re-investing the money into another property in the country, but can’t get a very straight answer. Would being a resident make any difference as well? Can anybody help please or would you know of someone who could give us reliable information.
    Mag

  • #58767
    Profile photo of Anonymous
    Anonymous
    Participant

    Try contacting “Fundacion Instituto de Propietarios Extranjeros” at Apartado de Correos 418, 03590 Altea (Alicante), Tel: (0034)965842312, 965842229, Fax: 965841589, e-mail: info@fipe.org

    This is a publicly funded organisation to provide information to foreign buyers and owners of property in Spain in the language of the foreigners.

    Good Luck

    Terry English

  • #58771
    Profile photo of Anonymous
    Anonymous
    Participant

    Thank you very much for this information. I have had a quick look at the website but will look in greater detail later on and probably send an email as well. It looks very interesting for many other issues as well. It does seem rather unfair that one has to pay such high taxes when only moving house and not selling up altogether. But then again, when was the taxman ever fair!

  • #58772
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi,

    I would be grateful for the name of this website. The previous reply gave an email address – did you happen to find a website? I am starting from scratch having bought a 2 bed apartment – would like to learn as much as I can.

    Thanks

    Angela 🙂

  • #58773
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    Anonymous
    Participant
  • #58774
    Profile photo of marios
    marios
    Participant
  • #58782
    Profile photo of Anonymous
    Anonymous
    Participant

    Thank you very much for this.

  • #58786
    Profile photo of Anonymous
    Anonymous
    Participant

    All non residents have to pay gains tax, unless they purchased the property before 31 december 1986. And this is applicable even if you decide to reinvest your gains in Spain, because this rule is only applicable to residents who are changing their main domicile

    Juan Bertomeu
    http://www.iurisconsulting.net

  • #58787
    Profile photo of Anonymous
    Anonymous
    Participant

    Hello Juan

    Thanks very much for your reply. We may well want to become residents in Spain in the near future and live in the house for some of the year. Could we then sell the spanish house and move to another without paying the full 35% tax? How would we go about getting the residencia, please? Your help is very much appreciated. Thank you

  • #58788
    Profile photo of Anonymous
    Anonymous
    Participant

    mh…I think you need to tread very carefully here indeed. Firstly applying for residence will not affect any capital gain due at this point as you were not a resident when the property was originally bought or for the greater period of it’s use.

    You might also need to check as to whether any “under declaration” amount was used when you made your purchase as, if you get your calculations wrong you could get hit with more than you expected.

    In these cases speaking to a Gestor would be a good way to clarify the situation. He would at least need the information on shown on the Nota simple for the property.

    I appreciate your objection to apying capital gains now that you plan to take up full time resience,but the ame situation would have applied in the U.K. in respect of a econd home.Why should it be any different in Spain? Too many people have come over here and abused the system and as a fully paid up resient for the last 6 years,this really annoys me!

    The simple formula is that you would pay a 35% levy on your indicated “net” gain. This takes in to account buying and selling costs.

  • #58794
    Profile photo of Anonymous
    Anonymous
    Participant

    Dear Guest

    Thank you for your advice. I have no intentions whatsoever of abusing the system. We are law abiding citizens and quite happy to pay necessary taxes. I am just trying to clarify the situation ready for when we move to Spain. The house we have at present is suitable for holidays but not for permanent living and that is why we would want to sell it if we lived in Spain. I think taking out Residencia is the preferred way of going about things, isn’t it? I read on this Forum that the Spanish government were not keen on foreigners living in Spain as ‘long term tourists’.

  • #58797
    Profile photo of Anonymous
    Anonymous
    Participant

    Yes, you would avoid the 35 % capital gains tax if at the time of the resale of the property you have obtained the resident status. It is unrelevant if you where not resident when you purchased.

    So being resident, the applicable tax is 15% if you have owned the property at least one complete year, and nothing at all if you reinvest the full amount, not only the gains, in another main domicile in Spain.

    Juan Bertomeu
    http://www.iurisconsulting.net

  • #58813
    Profile photo of Anonymous
    Anonymous
    Participant

    Juan…If what you say is correct then the whole issue is a complete farce.The Spanish state allowing themselves to be deprived of funds that would have been due? I cannot see how they can permit such a glaring loophole to exist?
    Apart from establishing your Residencia status…does an individual not have to prove that the property has been their main residence for a given amount of time?

  • #58820
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    Anonymous
    Participant

    Yes, you might deem it a legal loophole, but it is as I said before.

  • #58835
    Profile photo of Anonymous
    Anonymous
    Participant

    Juan

    Many thanks for your professional advice. May I just say in response to Guest, that I wouldn’t regard it as a legal loophole. There are many foreigners who start off by buying holiday homes in Spain and who then decide they would like to live there. Why should they be penalised when they want to move, just because they happened to be non-residents when they purchased the house. We have had our house for 5 years and are only now contemplating the idea of residency. We were never out to ‘make a quick buck’. It is just a situation that has evolved over the years.

    Thanks

  • #58945
    Profile photo of Anonymous
    Anonymous
    Participant

    mh
    I too am in this position. We bought as a holiday home and now realise that when we eventually move to Spain, the house would not be suitable for full time living.

    We pay our non-resident taxes every year, so I disagree with Guest on that one.

    Juan
    When you say that you need to own the property for one year, is that after you get residencia?
    I have read that you need to have residencia for 3 years and also live in the house for 3 years before you can avoid capital gains tax. There was also mention that you had to be over 65 also.
    Everywhere I read about this topic, I get a different answer – no one seems to agree on one.

    Any help would be appreciated as I’m sure this affects a lot of people.
    Thanks
    jem

  • #58997
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    Anonymous
    Participant

    Jem

    Yes I have also received different answers everytime I have asked someone so that’s why I asked the question on this forum. I am hoping that Juan says is true! Yes, I am pretty sure he means that you need to own the property for one year after you get residencia and then you wouldn’t pay the full capital gains tax.

  • #59738
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    Anonymous
    Participant

    We are selling an apartment in Spain purchased in 1982.

    Does anyone know the capital gains tax expected in this case?

    Many thanks.

    Soleil

  • #59538
    Profile photo of Anonymous
    Anonymous
    Participant

    We are selling an apartment in Spain purchased in 1982.

    Does anyone know the capital gains tax expected in this case?

    Many thanks.

    Soleil

  • #59740
    Profile photo of Anonymous
    Anonymous
    Participant

    Sorry, can’t edit the post, I should have said that we are non-resident in Spain.

  • #59540
    Profile photo of Anonymous
    Anonymous
    Participant

    Sorry, can’t edit the post, I should have said that we are non-resident in Spain.

  • #59743
    Profile photo of Anonymous
    Anonymous
    Participant

    As I understand it, if you bought the property before December 1986, then you are not liable to capital gains tax. This applies to both residents and non-residents.

  • #59543
    Profile photo of Anonymous
    Anonymous
    Participant

    As I understand it, if you bought the property before December 1986, then you are not liable to capital gains tax. This applies to both residents and non-residents.

  • #59747
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    Anonymous
    Participant

    😀 This is what I was hoping! Thank you for the reply, as I had seen mention on another site something about 5%…

  • #59547
    Profile photo of Anonymous
    Anonymous
    Participant

    😀 This is what I was hoping! Thank you for the reply, as I had seen mention on another site something about 5%…

  • #59748
    Profile photo of katy
    katy
    Spectator

    I thinkyou will have the 5% retention as you are not resident, this is incase you have any other debts like taxes etc. Your lawyer will be able to claim it back, takes a few months.

  • #59548
    Profile photo of katy
    katy
    Spectator

    I thinkyou will have the 5% retention as you are not resident, this is incase you have any other debts like taxes etc. Your lawyer will be able to claim it back, takes a few months.

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