Spanish CGT for non-residents reduced from 35% to 18%

Legislation to reduce Capital Gains Tax for non-residents from 35% to 18% (and increase it for residents from 15% to 18%) was approved by the Spanish Senate in October. The new regulations also reduce the withholding provision that non-residents pay when selling property in Spain from 5% to 3%. The new regulations come into force at the beginning of January 2007. Non-resident vendors should try to delay completion until January 2007 to benefit from these lower taxes.

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Source: http://www.spanishpropertyinsight.com/spanish_property_news_bulletin_latest.htm#3

DrMoriarty said:

Source: http://www.spanishpropertyinsight.com/spanish_property_news_bulletin_latest.htm#3

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any possability this will mean a mini 'glut' of properties for sale in Spain in the new year?and will it reduce the cost for a new buyer?

cuchulainn said:

any possability this will mean a mini 'glut' of properties for sale in Spain in the new year?and will it reduce the cost for a new buyer?

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To be honest, I think that there's already a glut of properties in certain parts of Spain (the Costa's in particular). This change doesn't automatically mean that prices will drop down though as the market is a lot slower (i.e. sticker) than Ireland; people often expect to have a property on the market for years before they will find a buyer!

The change in tax has been on the cards for some time now so it's possible that a lot of foreigners that have been planning to sell for awhile were waiting to take advantage of the change and bail out of the market. Very hard to know how many would be in this boat though as I think many non-residents bought in the first place with their retirement in mind and are probably more likely to sell up their PPR in their home countries before selling up in Spain.