CAPITAL GAINS TAX - CGT

Posted: Sun May 21, 2017 11:19am

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Johnoconnor

Posts: 4

5 helpful points

Location: Cabo Roig

Joined: 2 Feb 2016

Hi, If you sell a house in Spain 3% of the selling price is retained to offset against future CGT to be paid.

Well a friend of mine just sold his house and duly paid €3.300.00 on the sale of his €110.000.00 house which was deducted at source by his solicitor. He was then given a bill of just over €10,000.00 for CGT on the profit he has supposedly made. His solicitor said that he has to make sellers aware of this charge but in his 25 years of being a solicitor he didn`t actually know of anyone who has actually paid it..

MY QUESTION is why does the charge not be automatically deducted from the proceeds of the sale to avoid being chased by the authorities ??

Does anyone know what actually happens. ?? Should this money be paid now or should you wait till they ask for it. ?

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Posted: Mon May 22, 2017 12:02am

beckies

Posts: 95

15 helpful points

Location: Guardamar del Segura

Joined: 23 Apr 2017

Posted: Mon May 22, 2017 12:02am

I have bought & sold two properties in Spain.On both of them the solicitor automatically kept back 3% of the sale price for up to 1-2 years in case you have to pay government tax on any profit made.If the Spanish government deems you have not made a profit you should get it back via your solicitor.If they do say you have made a profit you don't get it back.Have never heard of also getting a bill to pay more tax!!The 3%withheld as far as I know is all they take.

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Posted: Mon May 22, 2017 8:36am

Johnoconnor

Original Poster

Posts: 4

5 helpful points

Location: Cabo Roig

Joined: 2 Feb 2016

Posted: Mon May 22, 2017 8:36am

Hi,

Thanks for that but did you make a profit or not and did you buy another property because then i think you won't have to pay the 19%. My friends have now returned to UK and no longer have a spanish property.

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Posted: Mon May 22, 2017 9:43am

beckies

Posts: 95

15 helpful points

Location: Guardamar del Segura

Joined: 23 Apr 2017

Posted: Mon May 22, 2017 9:43am

No I did not make a profit.I have to date after much pestering of the agent because they did the legal work too! got back the 3% tax on the 1st property.Waiting with bated breath for the 2nd one, and that was sold 2 years ago now!

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Posted: Mon May 22, 2017 9:44am

beckies

Posts: 95

15 helpful points

Location: Guardamar del Segura

Joined: 23 Apr 2017

Posted: Mon May 22, 2017 9:44am

Johnoconnor wrote on Mon May 22, 2017 8:36am:
Hi,
Thanks for that but did you make a profit or not and did you buy another property because then i think you won't have to pay the 19%. My friends have now returned to UK and no longer have a spanish property.

I did not buy another property at that time.

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Posted: Mon May 22, 2017 9:46am

beckies

Posts: 95

15 helpful points

Location: Guardamar del Segura

Joined: 23 Apr 2017

Posted: Mon May 22, 2017 9:46am

No no profit was made.

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Posted: Tue May 23, 2017 10:16am

shirley

Posts: 16

Location: Formentera Del Segura

Joined: 24 May 2016

Posted: Tue May 23, 2017 10:16am

I was under the impression that the 3% was only stopped if you are a non-resident

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Posted: Tue May 23, 2017 1:48pm

beckies

Posts: 95

15 helpful points

Location: Guardamar del Segura

Joined: 23 Apr 2017

Posted: Tue May 23, 2017 1:48pm

Hi Shirly, You are right,that is the case! I am resident,but was not there long enough to become a fiscal tax resident.So when I sold I had to pay this 3% C.G.to the government.Had I lived there long enough to have put in a tax return, I would not have had to pay this tax.It is the rule as far as I know that you put In a tax return at the end of the following year you arrive after keeping all your reciepts.Suggest speak to your solicitor as he is the best person to advise you.Hope this helps!?

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Posted: Tue May 23, 2017 1:48pm

beckies

Posts: 95

15 helpful points

Location: Guardamar del Segura

Joined: 23 Apr 2017

Posted: Tue May 23, 2017 1:48pm

Hi Shirly, You are right,that is the case! I am resident,but was not there long enough to become a fiscal tax resident.So when I sold I had to pay this 3% C.G.to the government.Had I lived there long enough to have put in a tax return, I would not have had to pay this tax.It is the rule as far as I know that you put In a tax return at the end of the following year you arrive after keeping all your reciepts.Suggest speak to your solicitor as he is the best person to advise you.Hope this helps!?

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Posted: Tue May 23, 2017 1:53pm

beckies

Posts: 95

15 helpful points

Location: Guardamar del Segura

Joined: 23 Apr 2017

Posted: Tue May 23, 2017 1:53pm

beckies wrote on Tue May 23, 2017 1:48pm:
Hi Shirly, You are right,that is the case! I am resident,but was not there long enough to become a fiscal tax resident.So when I sold I had to pay this 3% C.G.to the government.Had I lived there long enough to have put in a tax return, I would not have had to pay this tax.It is the ru...

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...le as far as I know that you put In a tax return at the end of the following year you arrive after keeping all your reciepts.Suggest speak to your solicitor as he is the best person to advise you.Hope this helps!?

I think it is 3 years as a resident you must live there.And of course be a tax registered fiscal resident to avoid paying the tax.But that is only if you have not made a profit!! If you have made a profit on your property you still have pay CG tax.