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Thread: Non-Resident sold property and bought another using all the money.

  1. #1
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    Default Non-Resident sold property and bought another using all the money.

    Reading that the EU have forced spain over capital gains tax to treat non-residents but uk/eu citizens equally by reducing cgt for non-residents from 35% to 18%.......is there any hope for us non-residents that used all the money from the sale to purchase a new house but still have to pay cgt on the increased value of the original property even though we have re-invested the total sale proceeds...residents can mitigate their cgt when they purchase a new house if they use all the proceeds from the sale....could this be seen as unfair to non-residents as was the original eu decision?.........has anything ever been mentioned about this......thanks for your time reading this post and i would value your answer. thanks..brian

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    Quote Originally Posted by miramar View Post
    Reading that the EU have forced spain over capital gains tax to treat non-residents but uk/eu citizens equally by reducing cgt for non-residents from 35% to 18%.......is there any hope for us non-residents that used all the money from the sale to purchase a new house but still have to pay cgt on the increased value of the original property even though we have re-invested the total sale proceeds...residents can mitigate their cgt when they purchase a new house if they use all the proceeds from the sale....could this be seen as unfair to non-residents as was the original eu decision?.........has anything ever been mentioned about this......thanks for your time reading this post and i would value your answer. thanks..brian
    I think you have missed the main point about CGT.

    As a non-resident the property you are selling cannot, by definition, be your main residence. For the UK, CGT is not payable on the sale of your main residence, whether you then blow the whole sale proceeds on your fancy or re-invest in another home.

    In Spain (unless things have changed) when you sell your main home you have 2 years to buy another otherwise you must pay GCT on the sale proceeds.

    There is no discrimination against non-residents in your example. If a Spanish resident sells a second home then GCT is payable regardless of whether a further second home is purchased with the sale proceeds.

    And as a further point, if Spanish tax law allowed you to be CGT exempt on selling your non-resident/Holiday/Second home if a further property is purchased then under UK tax law (assuming you are UK resident) you would still be liable on your UK tax deceleration.

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