Spanish Capital Gains Tax change will benefit expats.

From Expat-Village.com

Expat News
Spanish Capital Gains Tax change will benefit expats.
By
Dec 14, 2006, 07:20

Expat Village is edited and published by Iain Williams in Caracas, Venezuela.

Britons living or working temporarily in Spain could be in line to save thousands of pounds following cuts to Spanish Capital Gains Tax.

From 1st January 2007, the Capital Gains Tax on Spanish property sales and personal income for non-residents in Spain will drop from 35% to 18%.

The tax cut comes in the wake of a European Court upholding a complaint that is was unfair for the tax to be charged at 35% for non-residents, but at only 18% for Spanish residents.

Research by Mintel estimates that 800,000 Britons now own a second home abroad. Spain is the most popular location amongst more than four in ten respondents who have either already bought or who are looking to buy abroad.

Banco Halifax Hispania reckons the cut in capital gains tax will benefit all Britons who purchase holiday homes, live temporarily in or who work for short periods in Spain and are therefore not registered with the Spanish authorities as residents.

At present, those over the age of 65, who have lived in their home in Spain for the last three years are exempt from Spanish Capital Gains Tax.

The Spanish rules are in sharp contrast to the domestic UK tax regime governing property - here CGT is charged at 40% but, crucially, does not apply to your main home but only to a second home.

Banco Halifax Hispania was established in 1993 and offers a full telephone banking service. It has branches in Madrid, Barcelona, Málaga, Sevilla, Marbella, Fuengirola, Benalmádena, Torrevieja, Denia, Torrox, Los Alcázares, Calpe, Playa Flamenca, Mallorca, Guardamar, Sotogrande, Guadalmina and Mazarron. It is one of the leading lenders to UK residents looking to purchase property in Spain.

Expat Village is edited and published by Iain Williams in Caracas, Venezuela.