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current taxes for selling a property in Spain

current taxes for selling a property in Spain

Old Sep 9th 2008, 11:49 pm
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Default current taxes for selling a property in Spain

anyone up to date or sold recently ?

I think they reduced CGT to 18% same as residents.... at what point is this paid ? I dont think they take a retention on the day of sale if you are resident ? and what if you are not re-investing, leaving the country and closing bank accounts here ?
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Old Sep 10th 2008, 12:10 am
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Default Re: current taxes for selling a property in Spain

Originally Posted by spain
anyone up to date or sold recently ?

I think they reduced CGT to 18% same as residents.... at what point is this paid ? I dont think they take a retention on the day of sale if you are resident ? and what if you are not re-investing, leaving the country and closing bank accounts here ?
I am sure it is covered in several places but here is the most recent

http://britishexpats.com/forum/showthread.php?t=558478
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Old Sep 13th 2008, 1:21 am
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Default Re: current taxes for selling a property in Spain

spain, I confirm that Capital Gains Tax for non residents is now 18%, same as for residents. However, non residents will have a 3% withheld by the buyer at the notary when you sign over the property.

If you are a resident, any profit you make will be part of your income for that year, and will attract 18% tax on your yearly tax return. If you cease to be a resident after selling your property, and leave the country, you are still liable for any tax attracted while you were a resident in Spain. The Spanish tax authorities may decide to chase this debt outside Spain if they deem it is worthwhile, but I have never heard of any case were this has happened. Warning: if this amount (debt) exceeds 120,000 not paying CGT will be considered a criminal offence. Also, note that if you plan to conduct any kind of business in Spain in the next four years, the Spanish Taxman can request you to pay this tax then plus fines and legal interests.
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Old Sep 13th 2008, 5:13 am
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Default Re: current taxes for selling a property in Spain

Originally Posted by Inigo
spain, I confirm that Capital Gains Tax for non residents is now 18%, same as for residents. However, non residents will have a 3% withheld by the buyer at the notary when you sign over the property.

If you are a resident, any profit you make will be part of your income for that year, and will attract 18% tax on your yearly tax return. If you cease to be a resident after selling your property, and leave the country, you are still liable for any tax attracted while you were a resident in Spain. The Spanish tax authorities may decide to chase this debt outside Spain if they deem it is worthwhile, but I have never heard of any case were this has happened. Warning: if this amount (debt) exceeds 120,000 not paying CGT will be considered a criminal offence. Also, note that if you plan to conduct any kind of business in Spain in the next four years, the Spanish Taxman can request you to pay this tax then plus fines and legal interests.

thanks very much, thats really helpful
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Old Sep 13th 2008, 5:25 am
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Default Re: current taxes for selling a property in Spain

Did we clear up for certain the tax position if you are over 65 with a link to the relevant law or tax office legislation.
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Old Sep 13th 2008, 8:25 am
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Default Re: current taxes for selling a property in Spain

Originally Posted by Inigo
spain, I confirm that Capital Gains Tax for non residents is now 18%, same as for residents. However, non residents will have a 3% withheld by the buyer at the notary when you sign over the property.

If you are a resident, any profit you make will be part of your income for that year, and will attract 18% tax on your yearly tax return. If you cease to be a resident after selling your property, and leave the country, you are still liable for any tax attracted while you were a resident in Spain. The Spanish tax authorities may decide to chase this debt outside Spain if they deem it is worthwhile, but I have never heard of any case were this has happened. Warning: if this amount (debt) exceeds 120,000 not paying CGT will be considered a criminal offence. Also, note that if you plan to conduct any kind of business in Spain in the next four years, the Spanish Taxman can request you to pay this tax then plus fines and legal interests.
The 18% tax for your tax returns is only on a property deemed as a second residence not your principal residence. If it is your principal residence and you are re-investing in Spain and the amount that you are buying your new property for, is the same or more than what you sold your previous property for then you pay nothing. You would only pay on your principal residence if you were taking the money out of Spain. Any taxes owed are paid on the following years tax returns.
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Old Sep 14th 2008, 2:30 am
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Default Re: current taxes for selling a property in Spain

CGT at 18% both for residents and Non Residents. 3% Withholding for Non Residents that will be offset against the 18% CGT payable. In current market conditions is unlikely for many people to make any gains, therefore is worth considering a CGT claim to calculate if withholding tax has been overpaid. Do not forget plusvalia municipal, payable by the vendor in most cases. Visit www.taxprecision.com for last info on this topic.
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Old Sep 14th 2008, 3:48 am
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Default Re: current taxes for selling a property in Spain

Originally Posted by leonfdelcanto
CGT at 18% both for residents and Non Residents. 3% Withholding for Non Residents that will be offset against the 18% CGT payable. In current market conditions is unlikely for many people to make any gains, therefore is worth considering a CGT claim to calculate if withholding tax has been overpaid. Do not forget plusvalia municipal, payable by the vendor in most cases. Visit www.taxprecision.com for last info on this topic.
In a country where everybody undeclares what they actually paid for their property in order to save on purchase taxes whether Spanish or Foreigner, the actaul profit margins on paper can look very large!!! Despite the reality that the actual profit is often quite low. So this means, that somebody that actually didn`t make much of a profit on their property and possibly even a loss could still end up paying 18% CGT. Sounds crazy but this is what can happen if you undeclared when you bought the property and then when the property is sold the new buyer now wants to declare the full value. This is something that is now going to become more common as well.
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Old Sep 14th 2008, 9:28 am
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Default Re: current taxes for selling a property in Spain

what is this tax thing.I have heard it maney times.income tax.car tax.I used to hear it in the uk.......what is it
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Old Sep 14th 2008, 9:40 am
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Default Re: current taxes for selling a property in Spain

Originally Posted by betris
what is this tax thing.I have heard it maney times.income tax.car tax.I used to hear it in the uk.......what is it
Don`t be so SILLY We do have taxes here in Spain
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Old Sep 14th 2008, 10:01 am
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Default Re: current taxes for selling a property in Spain

Originally Posted by Jules Europe
Don`t be so SILLY We do have taxes here in Spain
only kidding.
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Old Sep 14th 2008, 10:11 am
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Default Re: current taxes for selling a property in Spain

Originally Posted by betris
only kidding.
Thats good, I thought for a moment that I had found somebody as silly as me
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Old Sep 14th 2008, 7:08 pm
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Default Re: current taxes for selling a property in Spain

Originally Posted by Jules Europe
The 18% tax for your tax returns is only on a property deemed as a second residence not your principal residence. If it is your principal residence and you are re-investing in Spain and the amount that you are buying your new property for, is the same or more than what you sold your previous property for then you pay nothing. You would only pay on your principal residence if you were taking the money out of Spain. Any taxes owed are paid on the following years tax returns.
Just out of interest, where in Spanish tax legislation does it actually say that gains from the sale of one's principal residence are taxable if taken out of Spain, even when proof can be provided that the sale proceeds have been reinvested in a new principal residence abroad?

iant
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Old Sep 14th 2008, 7:47 pm
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Default Re: current taxes for selling a property in Spain

Originally Posted by poshnbucks
Did we clear up for certain the tax position if you are over 65 with a link to the relevant law or tax office legislation.
It is contained in the Spanish tax law - Ley 35/2006. Articulo 33 4b

You can download a copy here.

http://sid.usal.es/idocs/F3/LYN10170/3-10170.pdf

It makes wonderful bedtime reading
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Old Sep 14th 2008, 7:48 pm
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Default Re: current taxes for selling a property in Spain

Originally Posted by iant
Just out of interest, where in Spanish tax legislation does it actually say that gains from the sale of one's principal residence are taxable if taken out of Spain, even when proof can be provided that the sale proceeds have been reinvested in a new principal residence abroad?

iant
This is what is commonly said by solicitors here and have been told this many times etc. But if you or anybody else can shed some more light on this, then there may well be a case that this is not entirely true. Thus meaning it could just well be another way here in Spain for the authorities to squeeze money out of people illegally
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