Capital Gains Tax – non residents

[PttParticipant]

Normally I understand there is a 3 per cent withholding tax that is deducted from the sales proceeds by the solicitor acting for you. After then what happens? – do you get the balance paid to you  and you can transfer it to a euro account outside Spain or is any other money withheld if it is thought there may be a further liability. It would be helpful to be clear about what is actually now the position and any information much appreciated

• This topic was modified 1 year, 7 months ago by  Ptt.

[SteveCadizParticipant]

I’d find any information useful too.

[barrymc1Participant]

That is correct, there is a 3% withholding based on the sale value of the property. If you have made a loss on the property, then you should be able to claim it back, as long as you are up to date with your taxes. And if you have made a gain, it goes towards whatever your Capital Gain liability may be. A good accountant (gestor) should be able to help you reclaim funds.

[SkodaSuperbParticipant]

I am selling my holiday home in Spain later this year. When I purchased the house it was just a shell- no electrics bathrooms windows etc.

I thought I would have been able to have offset these renovation costs for which I have all the official receipts against the final selling price which is obviously higher than the original buying price

My Spanish lawyer says this is not correct- is this really true?

[Susan J TurnerParticipant]

I’m sorry to say that it is true. In UK, it is possible to offset these costs against income tax, worked out by the rental income that you receive. However you cannot claim retrospectively, which means that work done prior to letting will not be counted.

I’m assuming that the rules are the same in Spain, although each region/province/city may have other rules in place. You will need to go to the local Ayuntamiento (Town Hall) and a local Gestor (a solicitor/bookeeper) and find out the local situation. They can differ.

hope this helps.

[spillanParticipant]

Spanish lawyers are often complete nuts, poorly educated. If you buy a house that is only a shell for lets say 200K you spend another 100K to finish the house your entry cost is 300K if you then sell it at 400K your taxable profit is 100K. That is the rule in all of Europe and most other areas too.

[KevinXativaParticipant]

Sorry but I disagree. Refurbishment costs can be offset against capital gains tax. You have to be able to show they are not maintenance cost or just replacement of existing items. See article on Spanish Property Insight from Dec 2014.

Regards

Kevin

[mariadecastroParticipant]

Just acquisition costs can be deducted:

Notary fees

Estate agent fees

Habitation Certificate cost ( if afforded by you)

Energetic certificate ( if afforded by you)

Patrimony gains on property sale are tax exempt From 2015 on if

1. As always,  they sell their first residency and reinvest in first residency within two years
2. or…) and this is NEW!
   You are over 65 years old and:
   a) Sell your first residency even if you do not reinvest in first residency again.
   b) Sell any real estate asset and invest these funds in a life annuity as acomplement of your pension, with a maximum limit of 240.000 Euros

[Chris NationParticipant]

Maria, does the  “and this is NEW! You are over 65 years old and: a) Sell your first residency even if you do not reinvest in first residency again.” apply only to registered residents or all owners?

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