Taxes when Selling Spanish Property

[Mr Roberts]

Dear Sir/Madam

We bought our Spanish property in 1999, but it was purchased by an non resident Company registered in the Republic of Ireland (Eire). Would the Spanish taxes be any less if we sold the Company, rather than the actual property and what would the taxes be?

Many thanks

[Lawbird Lawyer]

Dear Sir,

If you sell the companies shares the taxes would be less than selling the property itself, yes.

I don't have enough information to give you more details. This matter can become a whole lot more complicated.

Yours faithfully,

[Richard Byrne]

Is there an agreement on tax debtors from Spain returnng to ther country of origin.
My pensionista sister 67, lived in Spain for 6 years but returned to Wales due to the continuing ill health of husband 67.
Although she was registered on Padron and for NIE plus residencia, she did not become a fiscal tax resident. A 3% retention was, therefore, paid on a capital gain of 120,000 € in November 2009. Things are bad at present and she is paying for additonal care. ( By the way, she should not be payng ths tax because the lawyer and builder underdeclared the value of house by 100.000€. I think this contributed to stress and heart problems.
Is she likely to be pursued by the hacienda for non payment of remaining capital gain as I would rather pay this for her f I can by instalments. How much would it be. Where do I go to pay and when?
Please can you help us

[Lawbird Lawyer]

Dear Mr Byrne,

I would find it highly unlikley she will be pursued abroad, whether the UK or elsewhere, for this.

That is exactly the whole purpose of the 3% retention practised on account of vendor's CGT; so if they sell on and "run away" back to their home countries at least the Spanish tax man has recouped part of the CGT liability.

If you want to discuss this privately with me free of compromise, just for your reassurance, contact me.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt

[Richard Byrne]

Thank You so much for your help with my sisters problem. A great weight has been taken off the family. Your website is fantastic for those of us who are completely ignorant of the Spanish legal system. My sister was taken in when she bought the house and I advise all out there to take nothng forgranted . Check your lawyer is properly registered like lawbird and do your research.

Thank you once again
Richard and famly

[Lawbird Lawyer]

You are welcome Mr Byrne.

[Mr Tron]

Hi,

I purchased a property in Spain in 1996 as a holiday home for the family-
However as it's not being used I am looking to sell the place. During that time I have moved to Spain and become a resident as off 1 year ago ( previous to that I was uk resident).
I am living in a different part of Spain to where my holiday house was and am building a new place here to which I have already purchased the land.

What are the tax implications of selling the house I bought in 1996, taking in mind that I am now a resident and also that I have another property in Spain now?


Thanks, Mr Tron.

[Ian Carter]

My parents bought an appartment in Majorca in 1981 and are now looking to sell.As they have owned the appartment for so long,my undestanding is that they will not have any CGT to pay in Spain (though they will in the UK),but will they still have the 3% Retention/Withholding Tax deducted even though they have no CGT liability in Spain and then have to wait for 12/20 months for a refund.

[Lawbird Lawyer]

Dear Mr Tron,

It basically means you will not be able to benefit from tax allowances of any kind.

You will be liable for 19% CGT and PlusvalÃ*a tax just like a non-resident.

Unless you are able to produce a certificate from your Tax Office stating that you are a fiscal resident, in addition a 3% of the sales proceeds will be withheld by your buyer and paid into Tax office on account of your CGT liability.

The roll-over benefit you are probably inquiring on CGT must be on your main residence, which is not your case. Besides, you nee to be resident to benefit from it and you may noit qualify either, at least yet. Anf finally you need to have lived in that property for teh last 3 years as your main residence and be able to demonstrate it.

However there is an exception with an amendment that was brought in recently, providing you are resident in Spain, whereby prior to selling on your main residence you have bought another property in 2006, 2007 or 2008 exceptionally the deadline for this roll-over relief was extended over to the 31st of December 2010. Maybe you could qualify for that.

You need to have purchased another property in the interim prior to the sell of your own main residence.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt

[Lawbird Lawyer]

Dear Mr Carter,

Your understanding is correct.

Regrettably unless they are able to produce at completion before the Notary public a certificate from the Tax office stating they are fiscally resident in Spain the 3% of the sales proceeds will be withheld regardless if they are almost exempt from paying CGT after holding the property for so long.

They will of course be able to claim back the 3% after completing and lodging tax model 212.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt