Over 65′s are NOT losing exemption from Capital Gains when selling
Sunday, August 10, 2014 @ 1:22 PM
..................but there are some changes.
Despite the headlines in a free regional newspaper yesterday, the government has no intention of removing the exemption from capital gains for over 65′s when they sell their home. Under the existing law, anyone over 65 who sells their home (defined as their main residence for the last 3 years), is exempt from capital gains tax.
The draft tax legislation that was published last month did not contain any amendments to this aspect. This misunderstanding is quite widespread, and I answered an email on our website last month from a member who was told by her spanish lawyer that this was the case.
However, there some changes proposed. The government is removing the inflation allowance that is used to revalue the original purchase price when working out capital gains. For example, the purchase price of a property bought 5 years ago would be increased by 5.1% if sold today, and this figure deducted from the selling price to work out the capital gain.
From the 1st January 2015, this increase will no longer apply, and the original purchase price of the asset will be used.
To compensate for this change the tax rates for capital gains are reduced. This change applies to all capital gains not just property.
Source: Citizens Advice