How Much Tax Do I Pay ??

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22 Sep 2008 12:00 AM by CarlFort Star rating. 7 posts Send private message

IHi ,
Can someone please help me ..
I am thinking of selling my Flat . I bought it for E80K .. E35 cash and E45 mortage from my bank .. Now I want to sell it ASAP .. I will take E 90 K for it  .. So can you tell me What Tax Will I have to pay .. I`m in the UK  but thinking of rentiing another Flat in Spain 



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22 Sep 2008 4:43 PM by Roberto Star rating in Torremolinos. 4552 posts Send private message

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Assuming you are non resident in Spain, a 3% retention will be withheld at the notary when you sign, so if you sell for €90k, that means €2700 will be withheld. This is in lieu of any potential capital gains tax (CGT) resulting in the sale. This would be due on any difference between the (declared) purchase price and the sale price. 
But you can deduct the original purchase costs such as iva/transmission tax (7%) and notary fees etc. It is not entirely clear from your post whether you declared the full purchase price, or if the "cash" portion was in fact "black", but assuming it was not and you declared €80k at the time of purchase, your costs would have been €5,600 tax (7%) plus notary, land registry and lawyer fees. If the sale price includes an agent's fee, this can also be deducted (if you have a vat receipt for it!), so the chances are the 3% will adequately cover your liability. 
If it is too much, you can claim back the difference. 
If not, you will be liable to pay the outstanding amount of CGT, which is calculated at 18% of your gain (after deductable costs).
You will probably also have to pay a fee to cancel your mortgage.
Within 30 days of the sale, you should also pay any Plus Valia due. This is a local town hall tax on the increase in the rateable value (valor catastral) during your ownership. Unless you have owned the property for a long time, this is unlikely to amount to very much. 
Hope this helps.

_______________________

 

"Get your facts first, then you can distort them as you please"

Mark Twain

 

 

 




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23 Sep 2008 5:28 PM by hestidine Star rating. 1 posts Send private message

You should report use tax on the price you paid for the item, not the marked up selling price. That is the way the law works in CA and I assume it would be the same in other states



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23 Sep 2008 5:43 PM by FibbyUK Star rating in UK, Surrey & Playa F.... 2349 posts Send private message

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hestidine

Sorry I don't understand what your post means.

Also, what is the link contained in the word "price"?

I haven't clicked on it, as this is your 1st post, I am suspicious that it could be a link to a virus?!

So warn other EOS members NOT to click on this link.................yet!!!!

_______________________

FibbyUK

One off fee to pay your own La Renta tax (210 Form)
Check out my website:

http://www.payingtaxesinspain210form.pwp.blueyonder.co.uk/

 




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23 Sep 2008 7:50 PM by Roberto Star rating in Torremolinos. 4552 posts Send private message

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Welcome to Eye On Spain, hestidine. How lovely to hear about the law in California. It gets so boring just talking about Spain all the time!

Weird!
 

P.S.
I'm not touching that link either!!!!

_______________________

 

"Get your facts first, then you can distort them as you please"

Mark Twain

 

 

 




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01 Nov 2008 6:06 PM by claire T Star rating in Torremendo, Orihuela. 689 posts Send private message

EOS Supporter
Hi everyone - I am looking for some advice for a client.  

She wants to sell her apartment in Spain and I sent her details of the tax which would be payable on the sale.  However, she advises me that she won the flat in a competition - lucky person!  Does anyone know how you would calculate the capital gain if she never paid for it in the first place??

Thanks

_______________________
Claire



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01 Nov 2008 6:14 PM by Roberto Star rating in Torremolinos. 4552 posts Send private message

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There must still be a "purchase" price on the escritura, and transmission tax would have had to have been paid on it when she "won" it, surely?
The capital gains tax due is simply calculated at 18% of the difference between sale price and purchase price.
Assuming she is non-resident in Spain, when she sells it, 3% of the sale price will be retained at the notary in lieu of CGT liability, regardless.

_______________________

 

"Get your facts first, then you can distort them as you please"

Mark Twain

 

 

 




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02 Nov 2008 11:42 AM by claire T Star rating in Torremendo, Orihuela. 689 posts Send private message

EOS Supporter
Thanks Roberto - would there not be two transactions though?  The first would be when the competition organisers bought the property and the second when they passed it to the winner.  The second one would not involve any money changing hands but there would still have to be a new escritura, wouldn't there, to show the change of ownership.  Would this not mean that she would have to pay the 18% on the total figure as the second escritura would show that she paid 0€ for the property - or does a transfer rather than a sale mean the initial escritura with the sale price is the relevant figure? 

I thought I had CGT sussed but this has got me confused now! 

_______________________
Claire



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03 Nov 2008 4:59 PM by Roberto Star rating in Torremolinos. 4552 posts Send private message

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Can't you ask her to look at her escritura? That would settle it.
I have no idea how the competition organisers would have handled it. If it was a new property, offered by the developer as a prize, then it may be that hers is the first escritura anyway. If it was a second hand property, it may still not have actually been registered to the competition organisers at any point; an agreement may simply have been made between the previous owner and the organisers, that when they had a winner, they would pay the agreed "sale" price, but the property would registered to the competition winner. Otherwise, they would have been liable for transfer taxes and fees twice, which would be a bit silly.
Either way, unless competition organisers have some special dispensation, I don't think it would be possible to register a transfer with €0 on the escritura without the tax authorities getting just a tad suspicious!
You must find out what figure is on her escritura - that should be easy enough?



_______________________

 

"Get your facts first, then you can distort them as you please"

Mark Twain

 

 

 




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04 Nov 2008 11:46 AM by claire T Star rating in Torremendo, Orihuela. 689 posts Send private message

EOS Supporter
Thanks again Roberto - we'll check the escritura!

_______________________
Claire



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