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selling/buying and CGT - can anyone advise?

selling/buying and CGT - can anyone advise?

Old Jul 2nd 2011, 6:04 am
  #1  
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Default selling/buying and CGT - can anyone advise?

Due to my house builder/seller absconding in 2005 after my solicitor gave him the money. (don't go there) I had to legalise and register the house last year with only the building material costs shown on the escitura. A very low figure was accepted by the Notary. (I had already paid over the correct purchase tax but the abogado went bust whilst we were looking for the builder)

Problem is now I wish to sell there will be over 100000€ difference in the selling price (even in today's market). I will be buying another property but not in Spain.

As I never got round to getting my residence cert. it would mean a CGT bill of around 20000€. This I need to avoid as I will already be taking a massive loss on the sale. (sale will be around 50% of the value in 2005)

My questions are:-
If I leave Spain having sold my house and the buyers solicitor has retained the 3% of value as is the rule for non residents will the tax office chase me for the rest?

Or What do I need to do to become tax resident and how long does this take. (As I understand I would not need to pay then have 2 years to reinvest my gains in a property in any EU country).

I only have a private pension and am under 60.

I did search the forum but couldn't find the exact info I needed

Thanks
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Old Jul 2nd 2011, 6:18 am
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Default Re: selling/buying and CGT - can anyone advise?

If you only pay the 3% retention then they probably won't chase you but you could have problems if you ever come back to Spain.

You can't "become" tax resident unless you pay your taxes in Spain and if you want to claim the "roll over" relief when you reinvest the proceeds of the sale in another property you must have owned the existing property for 3 years while being tax resident for those 3 years.

Your private pension is irrelevant.

If you were over 65 and tax resident then you would not have to pay CGT even if you just took the money and did not reinvest it.

Basically you have 2 choices.

Pay the 3% and never come back to Spain as a resident.

Pay the tax and feel better about it but be much poorer!!
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Old Jul 2nd 2011, 6:37 am
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Default Re: selling/buying and CGT - can anyone advise?

Thanks Fred

Always done everything to the book as am not brave enough to do anything else but on this occasion I could not afford to buy again if all that money was swallowed up by the tax man. It is not as if I haven't paid the full purchase tax it is just that it never go to them.

Anyway it could take 3 years to sell but I hope not!
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