CGT on property sale/POA
 

We are putting up our bungalow for sale but will be seeking to downsize to an apartment in the same area ie Orihuela Costa. We are looking to sell for the same price as we bought. The selling agent has added the taxes we had paid on top of the selling price and using this this as the Original Purchase Price and says it will avoid CGT. I thought that to avoid CGT you'd have to sell at the price before taxes were added. Can anyone who has sold clear this for me please. Would using money from the sale to re-purchase affect any CGT, if payable?

Another thing: we are non-residents and may not not sell before our 90 day stay is up on 10 November so are thinking of getting a Power of Attorney to oversee matters while we are away in the UK. Should we use the selling agent (conflict of interest?) or an Abogado? Any advice on this too please. Muchos gracias.

Re: CGT on property sale/POA
 

The buying expenses are added to the purchase price and the selling expenses are deducted from the selling price in calculating the gain. Reinvestment relief only applies to residents.

Re: CGT on property sale/POA
 

Give POA to an independent professional qualified solicitor.

Totally your call but is it worth downsizing? What do you hope to save? By the time you have paid 10% tax (or IVA if it is new) plus notary, land reg etc etc you will have spent a lot of money which I would guess more than offsets any savings you hope to make on the new one which I assume you think is IBI and community costs.

Just a thought....

Re: CGT on property sale/POA
 

Agree with spainrico and is it really worth downsizing? If you are also used to living in a bungalow, the apartment can often turn into a nightmare. Especially if the soundproofing is poor you might end up having regrets.For real estate assets, the gain is calculated as follows:

• Disposal price (real sell price less disposal expenses – i.e. ‘plusvalía municipal’ tax)
• less
• Acquisition price (real acquisition price plus acquisition expenses – i.e. notary, registry, etc. plus improvements less depreciation).

Re: CGT on property sale/POA
 

Food for thought. Thanks.

Re: CGT on property sale/POA
 

Never give a selling agent power of attorney. You stand an excellent chance of being fleeced.