CGT rates 2009/2010

When considering the sale of my apartment in August this year, I was assured that, although I am non-resident, as the property had been purchased in 1989 (March) it would qualify for a discount off the CGT of 11.11% p.a. for the number of years owned between 1989 and 1996 (minus the first two years).

Now that I am virtually on the threshold of selling, my Estate Agent tells me this does not apply - any confirmation either way?

To further complicate matters - I have discovered that there will be new rates applied from January 2010 - 19% on first 6000 euros and 21% thereafter. Again - please - anyone able to confirm?

Many thanks.

Dear erisaman

I am afraid that your agent is not right when he says the 11.11%/year discount does not apply.

When in doubt, you only have to refer to the Form 212 instructions (Spanish - PDF).

2. Si la transmisión se ha efectuado desde el 30/11/2006: Sólo la parte de la ganancia patrimonial generada con anterioridad al 20 de enero de 2006 serÃ*a susceptible de reducción.

Regla 1. Cálculo de la parte de la ganancia patrimonial generada antes de 20/01/2006 Se determina la parte de la ganancia patrimonial susceptible de reducción en función de la proporción que representan los dÃ*as transcurridos desde la fecha de adquisición hasta el 19 de enero de 2006 con respecto a los dÃ*as totales transcurridos desde la fecha de adquisición hasta la de transmisión.

Regla 2. Cálculo de la reducción Para determinar el importe de la reducción, sobre la parte de ganancia que puede ser objeto de reducción, se aplicará el porcentaje de reducción del 11,11% por cada año de permanencia en el patrimonio del contribuyente que exceda de dos desde su adquisición hasta el 31-12-1996, redondeado por exceso.

Other reductions apply in your case, as inflation correcting factors, or many of the costs relating to the property (refurbishments, legal fees, agents fees, etc) which can be offset from the selling price.

Regarding the increase in Capital Gains Tax, it is true it will go up next year, but apparently only for profits made from financial products (stocks, bank deposits, etc), and not for capital gains as a result of selling property in Spain. The law has not been passed yet, so I cannot tell for sure. More information on El Gobierno aprueba el Proyecto de Presupuestos Generales del Estado (Spanish).

Please note that estate agents are very good at selling properties, but not so good at providing legal advice. Therefore you should rely only on advice given by qualified professionals. I recommend that you hire a lawyer to represent you on the sale of yourr property. Lawbird, a regular contributor of this site, offers Conveyancing services for this purpose.

Regards

Thank you ifv, I have looked at the AETA site but had failed to find that document. You have relieved a very concerned soul - and given me grounds for serious doubts about the estate agent.

Thank you again.

You are welcome.

Just in case, the link to the document is

http://www.agenciatributaria.es/AEAT...str_mod212.pdf

Regards