capital gains-other taxes -spanish property

Where do you hope to earn the profit? Are you planning on renting it out or selling it?

The Spanish housing market is probably in a worse state than Ireland right now so I think you should be wary:
[broken link removed]
[broken link removed]

i hope to profit from sale of the villa on completition, im fairly happy with realism of estimates of rise that the
(irish agent) has "promised", this agent is well known (several years)to a good friend of mine
who in turn owns a sherryfitz branch here in the west and has bought a villa here also, i have visited the devolpment and am happy with most things but need to confirm basics before i pay 30% and sign contracts etc. To allow for slow price increase i have been promised a 6 month (pa) letting
through the company of 600 per week, this too i want confirmation of before continuing with purchase.

the 6 month letting is more than likely just a payment they will take out of their very large commissions. If I was buying in Spain I would only be buying if I planned to use it a lot myself and could afford to keep it for many years as I doubt if the resale market is good at the moment.

In what area is the villa going to be built? I can't think of anywhere in Spain at the moment where a promise of capital appreciation could justify the risk.

If you resort to renting it out make sure you take into consideration the various taxes that would be imposed on you; property tax, community tax, wealth tax etc.

When you sell the property in spain you will be subject to CGT in Spain. In addition you have to declare your interest in the sale to Irish Revenue and calculate the CGT due according to Irish revenue rules. You then get a credit for the tax paid in spain (CGT rules may be different). Any overpayment will not be refunded by irish revenue.

tax on rental is 25% GROSS. No allowable expenses. Have you factored this in? 600 per week is low for villa.......where is it?
Have you factored in buying and selling fees.
For someone that owns and rents villa in Spain I would be surprised if you made much on a "flip" nett of tax and transaction costs to be honest.
As said before look at the long term.
Rental yields are good for villas in good locations with good year round occupancy.

doberden said:

the 6 month letting is more than likely just a payment they will take out of their very large commissions. If I was buying in Spain I would only be buying if I planned to use it a lot myself and could afford to keep it for many years as I doubt if the resale market is good at the moment.

Click to expand...

Good call.

karl said:

have booked villa in spain from plans, i know that spanish capital gains are 35%, if so are there any further taxes bringing profit (if any) back into the old sod ??,or any other problems before continuing with this project ? karl -mayo​

Click to expand...

I dont think you will need to worry about Capital Gains, perhaps Capital losses though.