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Selling, Buying and Capital Gain Tax - help?

Selling, Buying and Capital Gain Tax - help?

Old May 16th 2007, 6:16 am
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aspeangel
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Default Selling, Buying and Capital Gain Tax - help?

Hi again, more questions!!
Can anyone help with this, if I were to sell my house (at 250,000 for instance) and the buyer had a property to sell as well (at 125,000 for instance), and we decided to 'swap' properties and the difference went towards paying of my mortgage, would we still have to pay capital gains tax?? I have heard that you can claim back CGT if you reinvest within a year of selling, is this still correct?
Any help appreciated. Thanks in advance.
 
Old May 16th 2007, 4:20 pm
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Default Re: Selling, Buying and Capital Gain Tax - help?

Originally Posted by aspeangel
Hi again, more questions!!
Can anyone help with this, if I were to sell my house (at 250,000 for instance) and the buyer had a property to sell as well (at 125,000 for instance), and we decided to 'swap' properties and the difference went towards paying of my mortgage, would we still have to pay capital gains tax?? I have heard that you can claim back CGT if you reinvest within a year of selling, is this still correct?
Any help appreciated. Thanks in advance.
"Swapping" is an interesting concept! I am not sure if you can legally do that. Whatever you do it has to go on an Escritura de Compraventa when you sell each property to each other. How you deal with the cash is a seperate issue.

Either way, if you "sell" it for more than you paid for it (less expenses etc) you have made a capital gain and have to pay CGT.

The fact that there is a morgage on it doesnt affect the gain.

If you are a resident, and if you have lived in the house for 3 years, and if it is your habitual residence, then you can avoid CGT if you reinvest all of the money within 2 years.
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