Claiming back the 3% for Capital Gains Tax as a Non Resident

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This topic contains 10 replies, has 8 voices, and was last updated by Profile photo of Fuengi (Andrew) Fuengi (Andrew) 3 years ago.

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  • #57322
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi, Just wondering if anyone had any experience of this? I left Spain in 2011 and our house (which we built) has finally sold a month ago. As a non resident 3% was deducted from the sale price which I have been told I can claim back if I prove I had no profit. Has any one any experience of this, namely
    1) How long it took to get the money refunded
    2) If you can deduct legal fees, estate agency fees, travel expenses etc from the sale price? Or if it simply works as cost of purchase – cost of sale price as on the escritura de venta
    3) If you can just submit invoices or if you need to provide some proof of payment on invoices (our accountant doesnt seem very competent and is not sure about this)
    4) On point 3 – can anyone recommend an good accountant who specialises in this?
    Thanks for any help you might be able to give me.

  • #115988
    Profile photo of Anonymous
    Anonymous
    Participant

    I can answer some questions.

    1) A long time. In my case it took approximately 18 months. I sold in Feb 2009 and my wife is Spanish so we visited the tax office a few times to push things along. This by all accounts was quite quick. There are other factors today that will make your claim slower, ie the dire financial state of the governments coffers. I would guess that you will be waiting pushing 3 years, certainly not less than 2 years.

    2) Expenses you have incurred to improve the property. Yes, so for example, new bathroom, kitchen. You need proof of payment for the work undertaken. I am not sure about legal fees etc. Travel expenses, seriously are you having a laugh!!!!

    You will need to keep a Spanish bank account active as this is where the refund will be paid.

    Good luck, but seriously don’t hold your breath.

    It’s my guess that if your sale price is close to your purchase price (including the costs you want to claim for, refurbishment, legal expenses etc ), in other words you are claiming you made no profit, because you have a whole heap of expenses and legal bills you are hoping to drag down the sale price into non-profit region, then I think you could be looking at hacienda claiming you made a profit.

    You only need to understand that genuine buyers are being hit with extra IVA charges because Hacienda doesn’t believe the discounted purchase price. They are going to look very closely at any refund they have to give and expenses will seem easy fodder to dismiss.

  • #115989
    Profile photo of katy
    katy
    Spectator

    Sounds about right.

  • #115990
    Profile photo of Anonymous
    Anonymous
    Participant

    My clients have had payment back generally after 18 months (more or less).

    If you have submitted tax returns for all the years you have had the property, then you will find it is returned quicker. If not, you have (like many others) been defrauding the country of revenue and they will calculate how much you owe for all those years and then add some extra and maybe give you some back.

    If you have given them a Spanish bank account number, this also allows for the process to go through faster.

    Ian

  • #115996
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks for this – all sounds very daunting!!! I suppose they dont want to make it an easy process! Its just annoying as we really didnt make any profit on the house. The latest update is our accountant has come back and said that he thinks they will take the estimated value in the notarised document of the “declaracion de obra nueva” before we started building as this was very low and wont accept any other invoice – what a joke!!!

  • #115998
    Profile photo of Anonymous
    Anonymous
    Participant

    Welcome to Spain! Or should that be Adios 🙂

  • #116002
    Profile photo of Anonymous
    Anonymous
    Participant

    ” If not, you have (like many others) been defrauding the country of revenue “

    I will not consider this as fraud. Where a system does not work and it is designed in a manner suitable to the Hacienda. Than a tax payers acts in a manner he/she thinks it fit.

    I will call this as tax planning Spanish style.

  • #116248
    Profile photo of zenkarma
    zenkarma
    Participant

    @rebeccasmith wrote:

    Hi, Just wondering if anyone had any experience of this? I left Spain in 2011 and our house (which we built) has finally sold a month ago. As a non resident 3% was deducted from the sale price which I have been told I can claim back if I prove I had no profit.

    Hmm.

    Firstly, it’s important to understand the 3% is being retained not just for capital gains tax purposes which is what you seem to think it’s for, it’s being retained for all unpaid taxes and bills that may be liable on the property.

    You don’t say when the house was built or how long you lived there as a resident, non-resident etc, so it’s hard to say what taxes you may be liable for. Are you 100% sure you’ve paid all your non-resident land taxes on the property? Have you paid all your annual IBI and refuse collection taxes?

    Don’t just think the 3% retention is for capital gains because it isn’t, you may well find you owe more than the 3% they’ve already retained if you haven’t kept up with all the annual taxes liable on the property.

  • #113040
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks for this. All taxes etc have been paid on the house and are up to date (this was checked by the purchasers and double checked by our lawyers). In fact we paid off a town hall debt at the notary. Just cant understand why they would take an estimated cost before work started on the house as a final figure to calculate the CGT when we have valid invoices with IVA from a legitimate builder but absolutely nothing to back up the estimated cost.

  • #118603
    Profile photo of Anonymous
    Anonymous
    Participant

    Can anyone enlighten me please, (or has experience), as to the exact process of claiming back this 3% tax. I sold an apartment last November at a price lower than what I had bought it for and was told, (by my lawyer), that in order to reclaim this 3% (which was retained by the Buyer and paid at the Notary), I had to complete Form 211. This was done. However, I have recently been told by the Hacienda, (after chasing the payment), that it was the wrong form and I need to complete Form 210………………? Why or how different people are saying different things, is beyond me. Help, anyone, please?

  • #118612
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @mja

    211 is for paying the retention (a copy should have been given to you?).
    210 to submit CGT declaration and reclaim the retention

    Tax office links to help explain:
    https://www.agenciatributaria.gob.es/static_files/AEAT_Sede/Ayuda/GF00/en_Instr_210.pdf
    https://www.agenciatributaria.gob.es/static_files/AEAT_Sede/Ayuda/GF01/en_Instr_211.pdf

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