capital gains tax

i understand that if you are over 65 and a tax paying resident who has lived 3 years in spain, that you do not pay any cgt. if you sell yor house.what if you are under this age, a tax paying resident who has lived 3 years in spain, but  selling your only residence in order to move back to uk and buy a house.surely you should not have to pay cgt as you have no other property, and i think the law that says there is no tax to pay if you buy another house with the proceeds of the one you sold in spain, this would apply to anywhere in europe. cgt should only apply if you own another house already, not to your principal house.please would a tax professional inform me about this.

 Would Capital Gains Tax be due if you had not made a profit on the property you wish to sell in Spain, value of a property being several thousands less over the last few years.  

The property prices have fallen by 25% in many areas. You would therefore have no Capital Gain's. And no compensation for those of us who have lost thousands if the builder has cheated us and we just want to give up and sell up. After 3 years completion many people have lost a fortune, Add age to that and it is all very sad, how many more years will it take to get our dream back on the tracks we started with. The dreams of the older generation have been hit very badly just wish I was young enough to have the time to wait. 

CGT is not payable if you are over 65 , owned for 3 years AND have a fiscal tax certificate. All notarys are instructed to ask for this now or there is a 3% retention against CGT. You used to be able to roll-over the proceeds , within 2 years, into a non- spanish house , but my understanding is that they have changed the law to stop this. The law applies equally to a spaniard who sells & doesn't buy again . They pay CGT.

doedoe ; Yes it does if you have no fiscal tax cert. & in most cases the retention will apply at whatever price you are selling at. You can apply for return of the 3% retention but it's unlikely as many areas value the property on the ' valor catastral ' , which in many areas is way above what the real sale price is. In addition some areas , Marbella, Malaga, for instance will also issue a tax demand to the buyer for underpaying the 8% tax on property price as it was paid on the sale price & not the inflated valor catastral !

gus,

My understanding was that the retention applied only to non-resident sellers and that there was no age exemption from capital gains tax for non-residents.  Residents didn't pay the retention but included the capital gain calculation in the Renta return - unless they could claim exemption by being over 65 and having been on the register of eu residents for at least three years.  Has that changed?  Or was I mistaken?

jek; That was correct but the lightbulb came on in someones head at the Hacienda & they realised that they had many foreign registered residents who didn't make a tax declaration !  So in  2007 ( might have been 2008 , it was definitely before the 'crisis', & after they were forced by the EU to change the different CGT between resident / non-resident  to 18% for everyone.) they amended the law to state that the retention was payable if the resident did not have a fiscal tax certificate. I think you're meant to have 3 years certs. now. This took away one of the benefits of being a resident as now without a cert. you are equal. In theory this applies to anyone who doesn't have a cert. & would include any spaniards without one !

For those who make a return it's included in the Renta declaration , & over 65 's are exempt . All Notaries were advised of the need to ask for the certs. but some are still slipping through ! I know of an english couple who sold last may , both over 65 & residents but with no tax certificate & they received the full amount without retention.

Just a quick query. Is there no EU directive against this form of over-valuing that you identify?

i.e. "but it's unlikely as many areas value the property on the ' valor catastral ' , which in many areas is way above what the real sale price is "

 I am a non resident because by Spanish law we can not reside in our property without a Habitation Certificate, after 3 years we still wait for our Habitation certificate to be issued.

Main reason the builder has not completed the complex though he signed if off as complete. we have no Utility meters all though we paid the builder for them. Many unfinished areas need work to completed to the value of over €150k, 50% of the unsold units on the complex belong to the Bank which were claimed as the builders debt.

However, several residents live in builder owned rented units. Just 2 units have national residential owner's. The non national owners are paying €60 a month as community fees which covers the cost of the utilities service and many other services, yet spend just a few weeks a year during a holiday break in our apartments.

We personally do not let our unit as we would like to become residents, the law says we can not do so without a Habitation Certificate. We can not prove that we do not let our apartment. but the government will not believe this when it comes to taxes, we cant prove the time spent in our apartment because we have NO meters or any other record.

No Win Situation.

The Junta Andalucia impose a minimum value for calculation of transfer tax on purchase based on a multiple of the catastral value.

On sales for CGT purposes the Tax office or Agencia Tributaria send you an Informe Tasacion which is about a 15 page doument mostly full of screenshots from websites like www.fotocasa.es and they take the highest properties they can find for sale and subsitute that as the value. Initially they refuse all arguments such as condition of the property and the fact that their comparative properties bear no resemblence or indeed that they are FOR SALE and not sold!!!.

Their main argument is selling cheap costs them money.

We need to file appeals which involve specialist tax lawyers.

At the moment Malaga tax office is playing every game in the book not to hand back retentions and more to the point they are demanding additional CGT based on their artificial values.

They will not even process the return on computer - that alone takes 3 mths. I have not been in this week but I will next week becuase if you don''t keep walking in and out then they will not process at all. It's all games really.

But again this is Spain and this is the treatment we have come to expect.

But this should also serve as a warning to anyone buying or selling becuase there are games to be played and the tax authorities will like everyone try to steal from you.

Doedoe

Lack of a Certificte of Habitation will not stop you being a Resident you do not need to produce one at the office when you register for residency

Brilliant realistic post again Faro, but may I place a query against your suggestion " We need to file appeals which involve specialist tax lawyers."

Won't any appeals just languish in the courts as is the case with all other genuine attempts to gain justice/recompense in Spain, or would this form of appeal be a different process?

At this rate, I think we need to start making a realistic detailed list of all instances where the government are "playing games" and present it to the EU, alongside the evidence of  Keith and Suzie's petition!!! Talk about an unaccountable justice and tax system.......it appears we're only touching the periphery of the games that are being played at the expense of the consumer.

No-one could object to paying fair taxes where applicable, but to conjour up lies and deception, and manipulate evidence and the process of law (by delaying judgements/appeals/enforcements/payback of retentions/tax etc etc) is a completely different story. Transparency is all, so you are right Faro to focus on the fact that "this should also serve as a warning to anyone buying or selling becuase there are games to be played and the tax authorities will like everyone try to steal from you ".

There we go ads, faro has answered it perfectly. In addition his         " But this should also serve as a warning to anyone buying or selling becuase there are games to be played and the tax authorities will like everyone try to steal from you."  Is why the spaniards use any means possible to pay as little as they can.

And so the downward spiral of corruption, manipulation, lies etc is perpetuated, with little gain to any citizens except all those with flawed psychology, the banks, government/tax authorities, corrupt developers/agents, non independent lawyers, corrupt town hall officials etc etc. This psychology encourages deception and lies. Need I go on?

The Spanish government needs to get a grip and recognise that so long as they continue with these massive disincentives that come from this farcical state of affairs  (within all levels of the real estate and justice systems) and at the same time try and pull the wool over potential putchasers' eyes, the longer it will be that the economy will take to recover. We're getting wise to their tactics and will do all in our power to inform of their continuing "games"!

I'll rephrase....a civilised system with transparency and accountability is all!!!

Good luck to all, especially those willing to identify and challenge this uncivilised state of affairs.