Capital Gains Tax Affecting Sellers in Spain

For a long time now we have been dealing with the reclaim of Capital Gains Tax for non residents who sold their properties but paid over the odds in Capital Gains.

The EU intervention put paid to the 35% charged on the sale of a property.

Bringing the tax paid by both residents and non residents alike was brought into line at 18% which is where it has remained since January 2007.

Bearing in mind that the Capital Gains Tax payable is based on the NET gain when taking into account expenses we have seen many who in more recent times have been entitled to a reclaim. This is caused by the decrease in value of properties on the Costa Blanca and the fact that many are actually selling at less than they purchased.

There is, however, a hidden problem that sellers are unaware of and that is the fact that in January 2010 Capital Gains Tax on the sale of a property increased to 19% for a gain of under 6000€ yet the increase to 21% on gains over 6000€ seems to have escaped peoples notice.

Only on the sale of a property or in attempting to reconcile the amount actually payable is this coming to peoples notice.

At the point of sale 3% of the declared value is retained and the sellers are then left to work out what their Capital Gains Tax liability is and how to go about it.

Sellers really should be advised before they sell their property of their potential liability but no one seems keen to tell a seller that they might have more tax to pay than they thought.

This problem is largely aimed at the Non Resident home owner but can affect residents too, particularly if they have owned their property for less than three years.

So whilst the finding of a buyer is exciting it is wise to be aware of your financial situation.

For more information or advice on the sale of your property, particularly if you are a Non Resident in Spain contact Costa Blanca Lawyers via the website at http://costablancalawyers.com/ Your Capital Gains Tax liability is your responsibility.