CGT on a reformed property

[dredskiParticipant]

Hi, I just saw another post about CGT and it reminded me to ask.

We have a house in Mallorca and we are thinking about selling. We have spent a fair amount of money reforming and extending the property. Are the reform costs involved taken into account when CGT is calculated? If they are, is there a formula?

Thanks.

[paulParticipant]

I wouldn’t woory too much…
If you are a non-resident they keep 3% of the selling price towards CGT due….Just swallow that and get out of the country. How are they going to track you down for more?
Of course, if you intend to stay in Spain that is a different matter.

Paul.

[Aunty ValParticipant]

In reply to dredski – please make sure you have all the correct licences for the reform as well as all the receipts for materials and contractors.

As far as I am aware, unless you can provide all the correct documentation in respect of the reform – licencia de obra, final de obra etc etc, then you don’t stand a chance of offsetting this against CGT.

[dredskiParticipant]

Thanks both for your replies. We do have all the official documentation and receipts so that is covered.

Is the CGT based on the original cadastral versus a current valuation minus some percentage of reform costs?

[Aunty ValParticipant]

The CGT is calculated from the difference between the original escritura value paid, compared with the current sale price as per the escritura.

[Author]

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