October 27, 2006 at 2:51 pm #52395
I’ve just been told by an agent that a new law will come in to force in January 2007 which will mean the tax paid by vendors will be reduced from 5% to 3%. Does anyone know if there will be any tax changes for buyers?
October 27, 2006 at 3:59 pm #67065
Are you referring to the Capital gains Tax reduction as advised on this Forum :
October 27, 2006 at 4:33 pm #67067
No, he is not referring to that.
Yes, it’s true. As from the 1st January 2007 the purchaser will only have to withold 3% instead of the current 5% if the vendor is a non-resident.
This money is withheld on account of paying CGT, which is very different.
This change only benefits the vendor, because they receive an extra 2% they don’t get now, but it does not benefit in any way the purchaser. But this is not a tax as your estate agent has wrongly explained to you, it’s money withheld by the purchaser and paid to the spanish Tax Authorities on account of the CGT of the vendor.
As a sidenote, yes there are plans to cut the expenses of the purchasers if they are to use a mortgage. Notary fees and Stampduty associated to the mortgage are going to be reduced significantly as from the 1st January 2007. The law is to be passed later on this year.
October 27, 2006 at 5:22 pm #67071
That’s great as we are looking to complete in January/February 2007 and have a mortgage with a Spanish bank. Does anyone know where I can find any information?
Thanks so much for your help.
Have a great weekend!
October 27, 2006 at 7:01 pm #67073
It’s too early yet. The law still has to be passed, but will definately be before the end of this year.
Just keep browsing these forums and sooner or later a thread will be put once the law has been passed and we anlyse all the changes.
If you complete in February 2007 then you will be able to benefit of the new fiscal changes regarding Notaries fees with the mortgage and Stamp Duty tax on the mortgage (currently at 1%) which is to be reduced to 0,5% it seems.
All this will be confirmed once the law is in force.
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