Capital Gains Tax on the sale of a property within a year of the purchase

[Richard]

I bought an apartment in December 2007 and someone has come along unexpectedly, interested in buying it from me at a good price, considering the awful housing market conditions at present. I stand to make a profit of about 15,000 Euros. What would be the Capital Gains Tax position if I sell within 12 months of purchase? Is it better to wait until after 12 months? Is there a formula I can use to calculate how much tax I will pay? Thank you for your help.

[Inigo]

Before I can provide a straight answer, I need to know whether you are resident or non-resident in Spain.

• As a resident, if you sell within a year of the purchase, the profit will be considered part of your yearly income, and the sum will be taxed at the applicable rate.
• For non residents, Capital Gains Tax will be 18% regardless on when the property was bought.

In order to calculate the profit, have you deducted all the costs of the purchase? (taxes, fees, etc). Note that you can also deduct the costs of the sale (e.g. agency’s commission, lawyer’s fees, etc) where applicable.

If you are a non resident, and would like me to provide an exact figure for your capital gains tax liability, please let me have the following:

• Purchase Date
• Expected Sale Date
• Purchase Price
• Selling Price
• Purchase costs
  • Taxes: VAT, Stamp Duty, Transfer Tax
  • Fees: Notary, Land Registry, Lawyer’s Feess
• Selling costs (agency and/or lawyer fees if applicable).