Capital gains tax and Dacion en Pago

The bank has given us a period of interest only and we are trying to sell before the mortgage reverts back to a higher amount.

We have someone who is showing an interest in the property but we thought we would have to pay Capital Gains Tax on the difference between the price we paid for the house and the price we sell for. However we have discovered that this is not the case and that we will have to pay CGT on the difference between the price we paid and the Catastral Value, regardless of what we actually sell for.

The Catastral Value is far higher than the price we will be able to get for the house and will leave us with a bill of around €170,000 before we take into account any of the other selling costs.

Clearly this is a nightmare situation and we will end up with absolutely nothing once the costs are paid. I'm even concerned that we may not have enough to even cover the costs.

I am now back to considering if we would be better off with a Dacion en Pago, but I'm unsure of what the CGT position would be. Would we still be liable to pay this?

Sorry you have lost me on this one. You are saying that you will have a bill for 170,000 euro. What does this bill consist of for it to be so much?

Hello Sue,


The Capital Tax is calculated as follows: (Purchase price plus costs ) - (Selling price minus selling costs ).

For instance if you buy for 200,000 € with 20,000 € expenses and sell for 240,000 €, deducting 20,000 € of selling expenses, the difference is cero, so no CGT would be applied.

The Cadastral value is the figure used to calculate the taxable value of the property. If this taxable value of the property is not consistent with the selling price, this will normally mean that the buyer will get an extra Transfer Tax claim (collected by the autonomous regions). Technically, the vendor could also get an extra Capital Gains Tax claim (from the Spanish central tax office) but up to date we have never seen or heard of anyone receiving such claims. In any case, you cannot be charged for Capital Gain if there has not been any. If you let me have the exact figures we can provide with an approximate calculation.

Regards,