Tax on property when sold

Does anyone know if there is still a 2 year limit to buy when you have sold your property. Years ago when you sold your house, you had 2 years to invest the money back into another property or you had a crazily high tax of around 40% to pay...not sure if it's the same now as had 2 conflicting pieces of advice

You will pay 3% tax  of the sale  price which is held back, until the tax people make sure you dont owe them amy money, or are you talking about CGT have you made a profit on the property.  I dony know where  your  40% comes from.

** EDITED - At Poster's Request **

 Poppyseed, from the link you posted: "As of January 1st 2007..." The information on that site is about that old, dangerously out of date and misleading.

Longterm / Newworld: The two year rule you are referring to only applies to fiscal residents selling their principle home. However, you will need to be able to prove fiscal residency when selling, by virtue of a certicate of fiscal residency issued by Hacienda. Good luck with that, because they are making up rules of their own lately and even if you have filed a tax return here, they may refuse to issue one. The 3% retention on signing only (theoretically) applies to non-residents, who by definition are not selling their primary residence and therefore only have 3 months in which to pay the remainder of any CGT due (or reclaim all or part of the 3% if it represents more than their actual tax liability)

CGT is currently (I believe) 21% for both residents and non-residents.

Everybody, of course, has to pay the Plus Valia within 30 days of selling any property in Spain.

Apologies, it's a link I have had in my Favourites for a while, I would delete it but can't edit the post.

However, you will need to be able to prove fiscal residency when selling, by virtue of a certicate of fiscal residency issued by Hacienda

 When did you last sell a property?

I take it from this: "I, personally, have never seen a  “ certificate of fiscal residency issued by Hacienda” ", means you don't believe that such a thing exists?

To paraphrase myself if I may ,

Some of the information on this thread is dangerously out of date and misleading.

 My last transfer was this week.

The sad thing is, ** EDITED - Inciting- Against forum rules **, there seem to be some members who are only too willing to believe that your Utopian version of Spain is the only one, which can be dangerously misleading at times. If you don't have any recent experience (and the way things are changing in Spain currently, by recent, I mean within the last couple of months or so) ** EDITED - Inciting- Against forum rules ** You don't have to post on every topic, you know.

Many thanks for your input......i heard about the 40% about 5 years ago when a friend of mine sold her house and she had 2 years to buy another one and re-invest the money in Spain.

I am a fiscal resident and have been for many years. Not sold house yet but obviously with the current climate I am annoyingly going to lose money when i do as value has gone down so wanted an idea if there would be any more to lose outside of the normal taxes i will have to pay etc

I'm not looking to buy another property yet, and possibly never again in Spain, but may buy in the UK, so just wanted to make sure I could transfer the money to a different country without penalties for not re-investing the money back into the property market here

 The only penalty as such is that you could be liable for CGT. If you're selling at a loss then obviously you shouldn't suffer this. Unless, that is, that you under-declared when you bought (as used to be the norm). You could find yourself with a gain on paper even if you're losing. Hope for you that doesn't apply. There will be plus valia payable but usually this doesn't amount to much.

5 years ago I think the CGT for non-residents was 35% (maybe where the approx 40% came from?), and for residents 18%. After a bollocking from the EU, it was changed to be the same for both res and non-res, and is now (I think) 21%. But the 2 year thing only ever applied to residents selling their primary home, so it sounds like your friend was possibly confusing two separate issues.

As a fiscal resident, you have to declare the sale on your IRPF for the year in which the transfer takes place (so if you sell today, 2013, you declare on your return which you will submit around about May 2014), but you have the option to defer any CGT due for another year, to give you time to find another home to buy, thereby avoiding having to pay it at all. Personally, I think if you are using the funds to buy another primary residence in any other EU country, the same exemption should apply. But if Spain can get away with this it will.

If, however, despite being fiscally resident, Hacienda refuse to issue a certificatre of fiscal residency for whatever reason, you may find (as I have) that the buyer has to retain 3% of the sale price, and you may have to file a non-resident tax return to claim it back. Crazy I know.

Bear in mind, if you do repatriate the funds and buy in the UK, that exchange rates differences between when you bought and when you sell may mean that at least in Sterling terms you won't be losing too much (hopefully!) Good luck.

The 3%  & the 21% are both dealing with the same thing.

The 21% is the rate of CGT.

3% is the retention which is the amount retained that has been found by the Hacienda to be approximately the average amount that most people have a CGT  liability for.

If you make a profit of 100k & are a non .resident then a retention of 3k will be retained by buyers solicitor.

The actual amount due will be 21k & they will be after yiou for it regardless of where you go.

If they cannot get it off of you then they will claim it fom the purchaser.

A fiscal residency certificate should not be necessary if one has registered on the EU citizens register.

The Hacienda think , totally illegally, that anyone registereing is then fiscally resident. They therefore cannot have it both ways . Even anyone fiscally resident should not need one as johnzx said the tax return should do.

You havew 2 years 'rollover' in which to purchase another property or then pay the outstanding CGT due if you don't.

 Sorry, I thought I made it clear, the 3% retention is 3% of the sale price, 21% is charged on the profit. So if you bought for 100K and sell for 200K, the 3% retention will be 6K, whereas the 21% payable on the gain will be as you say, 21K (less the 6K already retained)

As for Hacienda not being able to have it both ways, I challenge anyone to go to Hacienda in Malaga and tell them that. I'm not saying this will happen to everyone, and if anyone has personal experience more recent than Thursday I'll be happy to hear about it. If you really want, I'll dig out the compraventa with the clause stating which bloody law and article number states that you have to present a fiscal residency certificate, but I really can't be bothered.

Quote Roberto, 12:36 today: Everybody, of course, has to pay the Plus Valia within 30 days of selling any property in Spain. ** EDITED - Inciting - Against forum rules **

This message was last edited by Roberto on 16/02/2013.

This message was last edited by Roberto on 16/02/2013.

Thank you to everyone for your input..much appreciated.

And thanks ever so much to Roberto, you've made it all a lot clearer for me now....more so than the Spanish officials i asked lol.....I love living here until you have to do anything official!

Roberto -I understand from various articles etc that using the proceeds of a house sold in Spain in order to buy a house in another EU , country (avoiding CGT) IS allowed. Perhaps Maria could clarify.

You're right, there's a couple of articles on this very site by a law firm:

"...article 38 of the Law 35/2006 if you reinvest the proceeds of the sale of your habitual residence in the acquisition of a new habitual residence, you will not pay CGT

"...as per the R.D. 439/2007 article 41, the funds must be reinvested within 2 years from the sale and as per the article 54 it would be considered as habitual/main residence if it has been used as residence for at least 3 years".

(http://www.eyeonspain.com/spain-magazine/pay-capital-gains.aspx)

"...the Income Tax Law 35/2066 (applicable to tax residents in Spain) in its article number 38 covers the potential of being exempt from paying Capital Gain Tax derived from the sale of a habitual residence, so long as the total amount received from this sale is reinvested in the purchase of another habitual residence.

"....Since Spanish Law does not expressly state that the application of this exemption is conditional to reinvestment of the funds into a further property solely in Spain, this leads to the opinion that you will qualify for the exemption even if you buy a property in another country of the EU, and not one just within Spain".

(http://www.eyeonspain.com/spain-magazine/capital-gains-tax-outside.aspx)

With the way Hacienda are behaving lately, I'm not sure I'd like to put that last point to the test though. it would be interesting to hear from anyone with personal (recent!) experience on this matter.