Tax payable on house sale?
 

If I sell a Spanish property which I have not lived in since 2008 (as so is currently not my main residence) there will be tax to pay (I am resident in Spain and pay my taxes here) how is this calculated?

Is it based on the profit calculated on sales price minus purchase price? At what rate? Any allowances? Can this be offset if I reinvest in another property?

I am based in Alicante province as I expect there could be regional variations.

Re: Tax payable on house sale?
 

Did you purchase prior to 2004?

When I last checked CGT was charged at 18% in Alicante.
Profit is sale minus purchase price and you may deduct selling costs & cost of improvements made
Residents are normally exempt from withholding tax.

Tax may be offset if you use the funds to invest in your new main home, within 3 years.

Re: Tax payable on house sale?
 

Thanks for your reply -

Good question, I actually purchased in 2002 but due to complications with legality/catastro it was not finalised until after 2004. Why is that important?

Establishing purchase price could get interesting, signed a contract off-plan build pre Euro days so paid in instalments in Pts/Euros...over a 2 year period.

I already have a new main home - unless I buy another and move!

Re: Tax payable on house sale?
 

Sadly, the rollover only applies if the house you sell is your main home (or was, within the last two years).

Up to 6.000 Euros, the tax rate is 19%.
From 6.000 to 50.000 Euros, the tax rate is 21%.
From 50.000 Euros and up, the tax rate is 23%.

You will also have to pay Plus Valia tax. This is a municipal tax based on the increase in value of the land.

Re: Tax payable on house sale?
 

OK, Fred thanks. Can't wangle that as I have had a tenant living there.....

So the best plan is try and prove my purchase price was as high as possible to close the gap on the sales price.

Out of interest is it payable at sales time or at next declaracion?

Yes, Plus valia will be another issue.

Bottom line both buying and selling here is a tax nightmare.

Re: Tax payable on house sale?
 

,It will be at your next declaration. If it was a family home, then you declare it, but tick the box that gives you 2 years to reinvest - sadly not an option for you

Re: Tax payable on house sale?
 

OK thanks.

The 2 years to reinvest reminds me - some Spanish friends sold their property, signed a contract to buy off-plan a flat which was due to be completed within 2 years. Unfortunately, it has not been finished and even though they have a signed legal contract to buy the tax office has demanded they pay their tax as they have not completed on the purchase within a strict 2-year window.