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I'm resident in Spain and currently selling a property in…

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Hi, I'm resident in...

Hi, I'm resident in Spain and currently selling a property in the U.K. Is there any way that I can reduce the 20% capital gains tax that will be charged by the Spanish tax office?

Accountant's Assistant: The expert will know how to help. Please tell me more, so we can help you best.

I purchased a property in the U.K. in 2002 which had a declared value of c. 153,00 euros and have just sold it for £230,00. If have been told by my Spanish accountant that I will have to pay 20% of the capital gain.

Accountant's Assistant: Is there anything else the expert should be aware of?

I don't think so.

Submitted: 11 months ago.Category: Tax
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Answered in 1 hour by:
8/1/2017
Tax Professional: Barbara, Enrolled Agent replied 11 months ago
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,382
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
Verified

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Capital gains (on both investments and property) are treated as savings income.

In 2017, residents pay tax on savings income progressively at 19% (€0-€6,000), 21% (€6,000-€50,000) and 23% (over €50,000).

For real estate assets, the gain is calculated as follows:

  • Disposal price (real sell price less disposal expenses – i.e. ‘plusvalía municipal’ tax)
  • less
  • Acquisition price (real acquisition price plus acquisition expenses – i.e. notary, registry, etc. plus improvements less depreciation).

As you can see, you can reduce your gain by including any acquisition expenses and improvements that were made to the property.

The following link contains excellent, additional information you will find helpful:

https://www.blevinsfranks.com/news/blevinsfranks/article/capital-gains-tax-spain

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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