House sale, what taxes are due ?

Hi, my mother has got a buyer for her property nr Alicante and is unsure what taxes will need to be paid.

She and my step father bought the villa 7 years ago for approx 230K euros and has sold it for 190K euros (the agents fees or 10K will come out of this figure)

Her husband passed away two years ago and the property was transfered into her name via her Spanish solocitor with no inhertance tax due.

Both my mother and her husband were retired when the moved to Spain and as such during there time there have lived off their Uk State pensions thus did not pay income tax.

My mother has the correct EU Spanish resdencial paper work, this was renued 18 months ago, all her bills,water/ electric/suma and local property related tax etc are all paid via direct debit and are all upto date.

During the past year she has spent quite a lot of time in the Uk living in a rental flat.

Back to my question, what taxes will she have to pay ? As she has sold the house at a considerable loss around 40K euros I assume that there is no capital gains. However her estate agent claims that she will have to pay 800 euros local tax + 5 to 6K (3%) as she is a non resident.

Is this correct ? I have been given some advice and each one contradicts the other.

Regards Ian

Hi Ian,

As far as I know 3% is for retention tax which the revenue withhold until it is confirmed that there are no debts outstanding, there is plus valia which I think is quite small maybe a couple of 100 Euro, you have your solicitors fees and that should be it.  The 3% is refunded to you once it has been clarified that there are  no debts outstanding and your solicitior normally does this for you.  You say that your mother sold her villa at a coniserable loss - 40K in the current climate is not a considerable loss this is a loss of 17.5%, according to the tinsa index the reduction in property prices on the costas is apprx 30% - but these figures are out of date and the more realistic figures are up to 40%.  So I think your mother did fairly well given the current climate! 

Angela59

IHS 

 you said

                          My mother has the correct EU Spanish residencial paper work, this was renewed 18 months ago,
 

Then you talk about her being non-resident.

If you want good info you will need to expalin your mother's status, exactly.