Capital Gains Tax - Eye on Spain

Posted by	Messages (sorted from oldest to newest)
Tuesday, November 07, 2006 Derjac Parcela I'm in Newport, Gwent and Duquesa CoS I've made 20 posts Send private message to Derjac	I saw this article in a Spanish paper a couple of days ago Capital Gains Tax for non-residents reduced from 35% to 18% Legislation to reduce Capital Gains Tax for non-residents from 35% to 18% (and increase it for residents from 15% to 18%) was approved by the Spanish Senate in October. The new regulations also reduce the withholding provision that non-residents pay when selling property in Spain from 5% to 3%. The new regulations come into force at the beginning of January 2007. Non-resident vendors should try to delay completion until January 2007 to benefit from these lower taxes. can anybody advise me on the following: How will this affect us in the future when we want to sell our property in 5 to 7 years time if we complete before January 2007? Does this mean if we complete before Jan 2007 we will be subject to 35% capital Gains Tax when we eventually sell Derjac Spam post? If so please click here to report it
07 Nov 2006 8:32 PM Mrs H Apartamento I've made 89 posts Send private message to Mrs H	Hello Derjac The news is fantastic but I think it must mean when you complete the sale and not when you complete the purchase. Therefore we all should benefit from this reduction. Unless I have got it wrong but the vendor would be selling so this is good news for us all, unless of-course you are just about to complete on a sale, or unless I have got it completely wrong - in which case please let me know!! Mrs H Spam post? If so please click here to report it
09 Nov 2006 7:11 PM Smiley EOS Superstar I'm in San Pedro de Alcantara I've made 2144 posts Send private message to Smiley	Just in case there is any confusion over the withholding tax charged to non residents at time of sale of property. The authorities assume that as a non resident you will not pay any CGT liability. Thus they withhold the 5% (current) at time of sale. This is a provision against the overall CGT liability. One is technically still subject to the 35% (current) but that depends on whether one goes through the procedure of the declaration. If one can prove no gain it is possible to claim the retention back but there is a time limit and you need to kick your lawyers rear end to sort it as quickly as possible. If one does not pay the full amount of tax, the authorities can pursue you for the amount outstanding should you decide to reinvest in Spain in another property. I have been told (by a RELIABLE lawyer) that they have started recording passport details on a computer system where they believe there is still a CGT liability outstanding and people entering the country on holiday might be stopped if their passport is checked. Quite whether that is a Chinese whisper or not I do not know but Big Brother is all around these days so I guess anything is possible. Rgds Smiley _______________________ *Smiley* - patrick@marbellamortgages.com www.marbellamortgages.com *Sarcasm is the lowest form of wit .....but any form of wit is an achievement* NO MATTER HOW MUCH MONEY YOU HAVE GOT, IF YOU HAVE NOBODY TO SHARE IT WITH, THEN ITS JUST NUMBERS IN THE BANK. TO ESCAPE CRITICISM DO NOTHING, SAY NOTHING, BE NOTHING! Spam post? If so please click here to report it
10 Nov 2006 4:50 PM chiefmissile Studio I've made 31 posts Send private message to chiefmissile	The reduction in capital gains tax for non residents will mean that investment companys will now flood the market with 2 bedroom propertys, i believe that we are about to see a price crash in Spanish property in the new year. Spam post? If so please click here to report it
11 Nov 2006 11:09 PM EOS Team Moderator I'm in Costa del Sol I've made 2141 posts Send private message to EOS Team	chiefmissile, I agree. I'm sure many invetors have been waiting for this moment for some time now and there's going to be a huge "off loading" of properties in the New Year. Bargain hunters paradise maybe? _______________________ Spam post? If so please click here to report it
12 Nov 2006 4:58 PM acezz Apartamento I've made 94 posts Send private message to acezz	This ruling may generate a sell off initially but I think the market will be stimulated in the long run because lower CGT is good for everybody. Purchasers put off by high CGT may now feel inclined to buy in Spain. More purchasers means a reduction in oversupply and stability in the market. _______________________ www.calanova.webeden.co.uk Spam post? If so please click here to report it
12 Nov 2006 6:14 PM test102 Parcela I'm in Marbella I've made 0 posts Send private message to test102	Good point acezz, it will be interesting to see what happens over the next few months with this and whether people do rush to sell and whether it's counteracted by more buyers. _______________________ ...corruption? Marbella? Don't be silly..... Spam post? If so please click here to report it
12 Nov 2006 7:05 PM Smiley EOS Superstar I'm in San Pedro de Alcantara I've made 2144 posts Send private message to Smiley	I'm with you too Acezz - I am sure that there will be more people looking to get out but think this will help to stimulate demand. We might have a little pain initially but in the long term I think it will be good for the market _______________________ *Smiley* - patrick@marbellamortgages.com www.marbellamortgages.com *Sarcasm is the lowest form of wit .....but any form of wit is an achievement* NO MATTER HOW MUCH MONEY YOU HAVE GOT, IF YOU HAVE NOBODY TO SHARE IT WITH, THEN ITS JUST NUMBERS IN THE BANK. TO ESCAPE CRITICISM DO NOTHING, SAY NOTHING, BE NOTHING! Spam post? If so please click here to report it
22 Nov 2006 1:21 PM Paulb Parcela I'm in Murcia I've made 1 posts Send private message to Paulb	How does the dual taxation system work between Spain and say the UK? If a client is in the UK 40% tax bracket and pays 35% Spanish CGT (or the proposed 18%) or 5% Spanish retention (proposed 3%) are they then all paid up tax wise, or if the money is taken back to the UK are they subject to the balance of their 40% UK tax bracket? Also, which official body is responsible for overseeing whether profits made are re-invested into further property, thus avoiding CGT? It would be really helpfull if replies to this were 'official' and not hearsay, or 'chinese whispers' Spam post? If so please click here to report it
22 Nov 2006 1:43 PM Smiley EOS Superstar I'm in San Pedro de Alcantara I've made 2144 posts Send private message to Smiley	The only way that CGT in Spain can be "avoided" is if the proceeds of property sale 1 are reinvested into a property which is your principal place of residence in Spain. Hence you will be a resident of Spain which it sounds as if you are not. Regarding tax on repatriation of the profits and whether you are liable for the uplift to your UK liability you should talk to a UK accountant. Rgds _______________________ *Smiley* - patrick@marbellamortgages.com www.marbellamortgages.com *Sarcasm is the lowest form of wit .....but any form of wit is an achievement* NO MATTER HOW MUCH MONEY YOU HAVE GOT, IF YOU HAVE NOBODY TO SHARE IT WITH, THEN ITS JUST NUMBERS IN THE BANK. TO ESCAPE CRITICISM DO NOTHING, SAY NOTHING, BE NOTHING! Spam post? If so please click here to report it

DISCLAIMER: All opinions posted on these message boards are the opinion solely of the poster and do not necessarily reflect the opinion of Eye on Spain, its servants or agents.