Government announces 50pc reduction in capital gains on second homes bought this year

The Government introduces another measure aimed at stiumlating sales of second homes.

By a second home or investment property in Spain between now and the end of the year and you will benefit from a 50pc reduction in capital gains taxes when you come to sell, thanks to a new measure just announced by Ana Pastor, head of the Public Works Ministry that includes the Housing Department.

The tax break will apply to both individuals and companies, but will not apply on sales between parents and their children. Nor will it affect main residencies, which already benefit from a reduction of 100pc in CGT tax (and only benefits residents, obviously).

The measure is clearly aimed at investors and holiday-home buyers, who will have to pay 50pc less in CGT when they come to sell, but only if they buy this year.

Rather misleadingly, this news has been reported in the Spanish press as a reduction in the ‘plusvalía‘, which most commonly refers to a municipal tax paid on the increase in land values, rather than capital gains, which is paid in annual tax returns, or taken out of the tax-retention in the case of non-resident buyers.


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