Welcome reduction in Capital Gains Tax

The Spanish government have announced a very welcome reduction in capital gains tax (Plusvalia) on second homes or investment properties purchased between May 11th and Dec 31st 2012. The reduction will be applied when the property is sold.

The announcement was made by Ana Pastor, head of Public Works, which includes the housing department, and could be a welcome boost for the property market.

Everyone is entitled to the reduction, both individuals and companies, residents and non-residents, but it will not apply to sales between parents and their children, nor will it apply to main residences which already benefit from a reduction.

The current capital gains tax rates for 2012 are as follows:

Residents

0-6,000 euros – 21%
6,000 – 24,000 euros – 25%
24,000 euros or more – 27%

Non-residents

Flat rate of 21%

All of the rates above will benefit from a 50% reduction if the property being sold was purchased between the specified dates.

This is a welcome stimulus for the property market that has been struggling to recover from the bubble which burst in 2007 leaving thousands of empty, unsold or incomplete properties all over Spain.

Advertisements

8 thoughts on “Welcome reduction in Capital Gains Tax

  1. DQ

    Are you saying the rates listed in the article will be 50% less? Or that those ARE the rates?

    DQ

  2. Erm… both. If you bought your property before May 11th you will pay the rates above when you sell. If you bought after that you will get a 50% reduction on the rates above. Anyone who buys from now until December 31st will also get the 50% reduction. It’s interesting that this has been announced a week after Marbella’s town hall announced their own reduction which was actually bigger at 60%.

    1. Hi David,

      Sorry for the delay!

      I think this applies to any property. The only stipulation is that it must have been purchased between May 11th and Dec 31st 2012 (and you are not selling it to a relative). I will ask my friends at Perez Legal to confirm that for you.

      Andy

  3. Pingback: » reduction in Capital Gains Tax – Real Estate News – Marbella, Spain

Comments are closed.