capital gains tax
Jul 19th 2006, 1:51 pm
#1
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capital gains tax
Do you have to pay capital gains tax why tou sell your home in spain if you only own one home? and if so at what rate?
Jul 19th 2006, 2:51 pm
#2
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Joined: Jun 2005
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Re: capital gains tax
Hi paul161,
YES! But if you are a Spanish resident there are rules about roll over to a new house and abatement.
Regards,
John.
YES! But if you are a Spanish resident there are rules about roll over to a new house and abatement.
Regards,
John.
Originally Posted by paul161
Do you have to pay capital gains tax why tou sell your home in spain if you only own one home? and if so at what rate?
Jul 19th 2006, 4:59 pm
#3
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Joined: May 2004
Location: Guadalhorce Valley, Málaga
Posts: 1,059
Re: capital gains tax
It is currently 35% for a non-resident and 15% for a resident.
There is draft legislation due to be heard in parliament in the next month or so with a proposal to make a flat rate CGT of 18% for both residents and non-residents.
This is only draft legislation and may or may not become law.
There is draft legislation due to be heard in parliament in the next month or so with a proposal to make a flat rate CGT of 18% for both residents and non-residents.
This is only draft legislation and may or may not become law.
Jul 19th 2006, 9:18 pm
#4
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Re: capital gains tax
Originally Posted by Beachcomber
It is currently 35% for a non-resident and 15% for a resident.
There is draft legislation due to be heard in parliament in the next month or so with a proposal to make a flat rate CGT of 18% for both residents and non-residents.
This is only draft legislation and may or may not become law.
There is draft legislation due to be heard in parliament in the next month or so with a proposal to make a flat rate CGT of 18% for both residents and non-residents.
This is only draft legislation and may or may not become law.
Jul 19th 2006, 10:07 pm
#5
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Location: Guadalhorce Valley, Málaga
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Re: capital gains tax
Yes, there are but only as a fiscal resident. I didn't go down that road at this stage because we don't know the status of the person enquiring.
Here is some information from Nige which he wrote in response to a similar enquiry.
Here is some information from Nige which he wrote in response to a similar enquiry.
Originally Posted by Nige
It depends on whether you are Resident or Non Resident (for the time being). If you are resident and can prove that you have been paying taxes or are at least registered with the Hacienda - the Spanish Tax office - then tax rate is 15%. There is some sort of explanation hidden away in the Hacienda's website: http://www.aeat.es/ Think it's found under "No Residentes".
Basically if you are a Non Resident, there is 5% of the selling price held back to settle CGT. The tax is worked out as the difference in the purchase price according to the Escritura (deeds) and the sales price. You are allowed to add expenses of sale and purchase as well as certain other expenditures involving propoerty improvements providing you can show valid taxed receipts. A grubby of piece of paper from Pepe for the new bathroom won't pull any weight with Senor Taxman. The GAIN is then taxed at 35% for Non Residents and 15% for Residents. However the EEC have almost got the Spanish tax bureaucracy to allegedly change this so that there is no penalty towards a Non Resident. The possible result would be that Spanish and Non Spanish Europeans owning a second home can look forward to the same rate being (it is rumoured) 18%. This is clearly fairer but not sure when it could change. Possible within next year or two.
Clearly if you are a resident and selling to purchase another home in Spain then the CGT is different and there are other allowances available.
If you are selling, then I would advise the use of a 'gestor' who could check out everything and give you local advice. Please don't take my comments above as 'gospel' but make sure you find out latest rules.
Basically if you are a Non Resident, there is 5% of the selling price held back to settle CGT. The tax is worked out as the difference in the purchase price according to the Escritura (deeds) and the sales price. You are allowed to add expenses of sale and purchase as well as certain other expenditures involving propoerty improvements providing you can show valid taxed receipts. A grubby of piece of paper from Pepe for the new bathroom won't pull any weight with Senor Taxman. The GAIN is then taxed at 35% for Non Residents and 15% for Residents. However the EEC have almost got the Spanish tax bureaucracy to allegedly change this so that there is no penalty towards a Non Resident. The possible result would be that Spanish and Non Spanish Europeans owning a second home can look forward to the same rate being (it is rumoured) 18%. This is clearly fairer but not sure when it could change. Possible within next year or two.
Clearly if you are a resident and selling to purchase another home in Spain then the CGT is different and there are other allowances available.
If you are selling, then I would advise the use of a 'gestor' who could check out everything and give you local advice. Please don't take my comments above as 'gospel' but make sure you find out latest rules.
Last edited by Beachcomber; Jul 19th 2006 at 10:13 pm.
