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The small flat on the coast mentioned in my other post was bought in 1976 for £6,500--and although it has not been sold yet, there are a couple of people interested in making an offer when we meet on site next month. So first of all I'd like to find out if a private sale is possible under the Costas Law-- as I have heard it has been modified recently. Then if I were to accept an offer of 150,000 euros, would there be CGT to pay both in Spain AND in the UK on this sale?
Hello Angelita,
Further to your question on the Ley de Costas, and regarding its possible effect on the legal status of your property, perhaps it would be more convenient for you to put it up for sale at the price you think it’s worth, without considering any legal problems which may or not affect the property, and let the buyer’s lawyer or bank (in case there is a mortgage involved) find out if the Ley de Costas has any impact on its value.
With regards to the Capital Gains you will attract when selling your property, please find below a few calculations:
Date of Purchase 01/01/1976
Date of Sale 01/08/2012
Purchase Price 8,500.00 €
Purchase Costs 850.00 €
Sale Costs 5,000.00 €
Selling Price 150,000.00 €
Updated Purchase Price 12,068.98 €
Coefficient. 1.2908
Capital Gains 137,931.02 €
Days Between Sale and Purchase 13363
Days Between Purchase and 19/01/2006 10977
Capital Gains Subject to Reduction 113,303.06 €
Number of years for the calculation of the reduction 22
Reduction resulting of applying the inflation coefficients 113,303.06 €
Reduced Capital Gains 19,627.96 €
Capital Gains Tax Rate 21%
Capital Gains Tax 4,121.87 €
Please note these figures are approximate. I would need to know the price you paid in pesetas, to get its equivalent in euros, as I cannot find the GBP conversion rate historical data for 1976.
Watch out for the Plusvalia Tax (IIVTNU), which, depending on the valor catastral of your property, could be considerable.
I’ve included €5,000 as selling costs (Taxes, Solicitor, etc.), as an estimate. If you are using an estate agent, this figure could be significantly higher.
Note that you will have 3% from the purchase price withheld by the buyer, and lodged with the tax office. You will be refunded the excess, provided that you are up to date with your non-resident’s tax obligations in Spain. Your lawyer should be able to assist you with your fiscal matters.
If you do not have a lawyer, I would like to take the opportunity to offer you our Conveyancing for Property Sale Service .
Please let me know if you have further questions.
Kind regards,
Many thanks, Patricia-- that is very helpful information. I shall be in Spain next week, and will make the inquiries at the Town Hall, and will contact you after I have had a possible offer. I am very happy to have made this contact with your law firm. I am still somewhat confused, whether there would be additional CGt to pay in the UK also, if such a sale were to happen and the CGt was paid in Spain?