Taxes when Selling Spanish Property

Dangerous Disco · 05-29-2012, 08:14 AM

I bought my house which was a new build in 2004. My solicitor seems to be taking a long time obtaining the Plusvalia amount from the town hall after the sale of my house in order to settle my fees from which he still retains my 10000 euros deposit as he cannot send any surplus amount back due to not knowing the Plusvalia amount to retain. Now I was told by my solicitor it would not be that much for the Oriheula area of Costa Blanca, but the amount is still unknown. What takes the town hall so long to come up with an answer to such a query? Also after selling my house, I was disappointed to find out I have to purchase a habitation certificate that will cost approximately 700 euros in order for the name on my water bill to be transferred to the new owner. Should this not be supplied by the town hall for free as if my old house was inhabitable I would not be allowed to live there ? Is it not the responsibility of the town hall or the builder top supply such a certificate also?

**Patricia** · 06-06-2012, 11:15 AM

Hello Dangerous Disco,

Something similar to the UK private resident relief also applies for reinvested capital in a property in the UK after you sell in Spain, however you have to be a registered resident in Spain beforehand if you want to take advantage of this.

The taxes you will attract are Capital Gains tax - 21 % and not 19% as it was increased last year- and plusvalia municipal tax (IIVTNU).

If you are a fiscal resident, and therefore obliged to file your Income Tax Return (IRPF), you will have to declare that you sold a property and that your capital gains was X but that you wish to reinvest the proceeds of the sale on another property within two years. There is an option on the income tax form (Modelo 100) for this purpose. Within two years, as soon as you buy a property in the UK, you will have to notify the Spanish Taxman in writing, with details of the transaction confirming that you are eligible for this exemption.

You can read various posts and information here: http://belegal.com/forums/showthread...ollover-relief.

Regards,

johnM · 06-06-2012, 06:40 PM

I'm buying a country property in Murcia. It hasn't been extended but has been improved inside with an additional bathroom. It's been 4 weeks since we started and my solicitor is saying country properties do not have a new habitation ceritificate for every new owner and only the original is needed which he is trying to "sort out"
what do you think

**Patricia** · 06-12-2012, 02:32 PM

Hello JohnM,

The First occupation Licence is only issued once but as there have been improvements made in the property, your solicitor may be trying to obtain a licence for a minor construction ( Licencia de Obra menor ).

Regards,

mr c norris · 06-29-2012, 11:21 AM

I have a holiday home in spain which me and my wife purchased for £175000 in 2000 we are looking to sell for £200000 what are the tax implications for the sale i am a high rate tax payer my wife is a basic rate tax payer we are both domiciled in the uk.

Andrea Dorset · 10-09-2012, 09:40 AM

Hello, I want to ask your advice on behalf of my parents. They bought an apartment in Catalonia in 1986 for 2 million pesetas (usual story - my dad was pressurised into agreeing to 1.5 million pesetas being the official price on the escritura & the rest in cash to the Dutch owner) The deal was cut by my then Spanish partner & his estate agent friend. Now my parents are 80 & can no longer make the twice yearly journey over to their flat. My name is on the escritura as joint owner with my Dad - because I lived in Spain at the time, so the lawyer advised us that would be wise. Now, in the process of looking for a house in the same area in Catalonia (25 years after I left) I have been made aware of the taxes that need to be paid (IBI & Suma?) on a yearly basis when you own a property in Spain. This lead me to question my Dad as I don't ever remember them mentioning any taxes- just the gastos de comunidad. It turns out that my Dad (and myself as I am on the escritura) have never paid any taxes or filed a declaracion de la renta since buying the apartment in 1986. To help my parents out with selling the apartment, I had thought about buying it from them, even though it is too small for my needs as it only has 2 bedrooms & 1 bathroom- my future home for retirement in 10 years needs to be bigger for my partner and our joint 6 children. My dad cannot even afford the gastos de comunidad any more , so I am paying them for him. The apartment is 50 years old & those trying to sell in the same block for 3 years are up for sale at 140.000 - 200.000 Euros, my dad's is as original with not many improvements. What should we do - how can we pay back the taxes since 1986. Is it best to wait & sell & then pay or to contact the tax office. Can I just take it over from my Dad as I am on the escritura & then I can assume all responsibilities for it? An estate agent has recently advised that we could put it up for sale for max 115.000 & expect 100.000. My Dad is extremely worried, I know ignorance is no excuse but he hasn't avoided paying tax on purpose. Your advice would be most appreciated. Kind regards Andrea

Keith Hollingworth · 01-14-2013, 08:15 AM

Hi i want to sell my property i hope to make about €60000 profit i will then use the profit plus some of my origional purchase price to buy a smaller property what taxes will i be liable to i am 61 years old resident and tax paying

**Patricia** · 01-14-2013, 03:38 PM

Dear Keith,

As of 1-1-2012 residents pay up to 27% CGT on the profit made on the sale of a property. In order to calculate this profit (the €60.000 figure you quote is reduced based on when the property was bought), I will need more details to calculate your tax liability, such as the original purchase price, date of purchase, date of selling and selling price.

As a 61 year-old resident you will only get a partial exemption if you reinvest the proceeds within two years of the sale.

Regards,