Can I avoid Capital Gains tax by declaring La Renta?

Hi,

1) yes you are classed as a resident.

2 ) No. It would be 113,000 -58,000 ( which you obviously put in as cash ) =55,000 profit.

3) Yes, you pay CG whether you are resident or non-resident.

4) If you declare at the tax office & have an up to date tax certificate then their will be no deduction by the buyers @ the notarys.

    At the notarys now , the fact that you might have a registration certificate on the 'registro de extranjeros' ( replaced the old residencía card ) does not entitle you to not have the cgt stopped by the buyers & paid in to the Hacienda in your name. All notarys have been issued with instructions , not only to see the residency cert. but an up to date tax cert.

5) I'd say nothing.

Just to clarify the situation. Your tax liability is 18% but they do not take that , they only deduct 3% as a payment against your cgt liability. I.e. If you sell for 200.000 less mortgage,87,000= 113,000 less deposit ,58,000 =55,000 profit.  If you have a residencía cert. & no tax cert; or you are a non-resident then the buyers solicitor is required to withold 3% & pay it in to the Hacienda in your name.

The original price you paid will also be adjusted by an inflation correction factor for each year you have owned it. ( there's a table here on one of the threads )

If it was me I would register with the tax office, sell & then you can square up the tax with them at the annual time.

If you don't re-invest the whole of your profit then you are liable for cgt on the whole of the profit.