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Good times ahead for foreign property buyers in Spain

Article Date : Monday, July 18, 2005       Bookmark on Facebook   Bookmark on Del   Bookmark on Digg   Bookmark on Facebook   Bookmark on Reddit   Bookmark on Spurl   Bookmark on Furl   Bookmark on Yahoo   Bookmark on Magnolia   Bookmark on StumbleUpon   Bookmark on BlinkList

British property buyers could be in line to save £millions in capital gains tax when they sell their family holiday home or investment property in Spain after the EC ruled they were being “discriminated against” compared with Spanish-resident property owners. The Spanish Government grabs capital gains tax at a flat 35% of the profit – difference of registered purchase price to selling price – from British and other ex-pat owners, but charges Spanish owners only 15% CGT if they have owned a property for at least one year. The European Commission has sent Spain a formal request to amend its discriminatory legislation. It considers that the “difference in the tax treatment of the two categories of taxpayers, in so far as it results in a higher tax burden on non-resident individuals in situations objectively similar to those of residents, constitutes indirect discrimination on the grounds of nationality prohibited by the Treaty.” EC officials claim the higher tax burden on non-residents may dissuade individuals from taking up employment or buying immovable property in Spain while remaining resident for tax purposes in another Member State. It also makes it less attractive for Spanish employers to recruit labour from other Member States rather than locally. If the Spanish Government amends its tax rules following the EC ruling, British and other non resident property owners would pay only 15% capital gains tax when selling after a year and enjoy the same progressive discounts on CGT as Spanish residents if they sold within the first year. news from propertnetspain
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