In order to
encourage real estate property investments, the Spanish Government has approved
a Royal Decree to be effective as from 11th May.
Here is an
overview of the new provisions. For details as to how it might affect you please
contact your financial advisor or us Bufete Morell.
The main
measure is a reduction of 50% in the Capital Gains Tax on sale proceeds for
properties bought between 12th May and 31st December
2012. This is regardless the future sale date.
The tax
remission benefits both natural persons (residents and non-residents) and legal
entities, under the following conditions:
-
The property must have been purchased between 12th May and 31st December 2012
-
It must be an urban property (residential or commercial)
-
The buyer and seller should not have any connection, either corporate or family
- The property should not be considered a commercial development or venture.
The tax
reduction will be applied in the annual Income Tax declaration or in the
company tax of the fiscal year in which the capital gain was generated.
Provided that
the applicant meets all necessary requirements, the capital gain to a non-Spanish
tax resident on sale of a Spanish property is taxed as follows:
Sale in
2012-2013
Before: 21 %
Now: 10,5 %
Sale in 2014
or after:
Before: 19%
Now: 9,5 %
The tax on
capital gain to a Spanish tax resident is as follows:
Sale in
2012-2013
Before: until 27% (depending on Gain)
Now: until 13,5 %
Sale from
2014
on
Before: until 21%
Now: until 10,5 %
In the case
of companies, the Capital Gain is taxed at approximately 15%.
We would like
to remind you that the tax for newly constructed properties remains at 4%
until 31st December 2012.
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