Good morning from a cold UK

As we have said in older posts we are moving over to Spain later this year.

We are in a bit of a quandary as we have been offered a house swap and don't know if there any problems associated with this.

The house is near Crevillent and we are told it has the certificate of Habitation but we have also been told that it's not 10,000m2 that is needed for a rustic/country property.

It's not a new property and they said that after all these years there would be no problem with this but that's not to say it wouldn't.

Please can we have your thoughts and anything you can think of that might affect us? TIA

They could right but it depends on how old it is. The planning department or a local architect might be able to give you an idea. Ultimately it depends on what the planning requirements were at the time it was built. We built 13 years ago and the rules have changed significantly since then, but they cannot be applied retrospectively.

Be aware that you will both have to pay all the taxes that would be involved in a proper sale. That would include CGT on the present owners and since, as of 1st January, there are no longer any indexation allowances against CGT which on an old house could mean a very large CGT bill.

They will use the official value of the property which is based, to an extent, on the catastral value.

So sadly, no, you cannot do a house swap, it has to equate to a normal financial transaction and there is no point in just using silly figures as the taxman will use his figures and send you a demand for the difference.

It may make you feel better, it's been pretty cold in Crevillent.

So you are saying that we could be in for owing a large amount of money?

It has been reduced from (not sure without looking) 175,000 to 125,000 (sterling) so we could have to pay extra tax?

Missile, how cold?

It was 3 degrees on old years night. It was warmer in many parts of the UK

Assuming you reside in the only property you own in the UK, you would not normally be liable for tax or CGT on the sale of your house in UK.

You will only be liable for tax on the purchase price for the house in Spain. The owner will be liable for tax on the sale and MAY be liable for CGT.

They will be liable for CGT but, to clarify, they may qualify for an exemption if they are over 65 or intend to make the new purchase their permanent home, in which case they will be deemed to have invested the entire (notional) proceeds in the new home.

You will be liable for the transfer taxes and other fees for registration, etc. which could be in excess of 10% of the notional price.

Would the notional price be the original market price or the current lower price?

As they wish to house swap, it seems likely that the present owners are Brits who wish to return to the UK(?). Although the property is "old" it seems unlikely Brits would have owned it for long(?) and thus it seems unlikely they will have "a very large CGT bill". If (as I suspect) there has been zero capital gain during the period of their ownership, their CGT liability will be zero.

In any event this is all irrelevant to the OP, Dizzydee will not be liable.

The notional price will be determined by the tax office based on the current catastral value multiplied by a factor depending on where the property is located. The factor is anything from 1 to 5 times the catastral value.

As far as I can find out, the factor for Crevillente is 2.1.

The owner is living in the UK, so not sure if they use to live there full time or it was a holiday home.

What on earth is the catastral value?

That may affect them, but makes no difference to you.

You may find this helpful? > http://www.tumbit.com/how-to-guides/...-in-spain.html