CGT for residents selling houses in Spain

[Unicorn]

http://www.typicallyspanish.com/news-sp ... 2014.shtml

Scroll down on this and La Vanguardia says over 65s will not pay tax if they take out a pension plan.

I think it is smoke and mirrors but will bbe interested in other's comments.

[Unicorn]

And here is another. Scrolll down to reforms, the wording is very tricky...

http://www.lamoncloa.gob.es/lang/en/pre ... lance.aspx

[infoseeker]

Freeatlast- never heard of the Round Town News? Must be the only person in Spain who hasn't!
I have already thought of phoning them or emailing, and then I hope it will be clarified in next week' s edition.
Trouble is I haven't any proof they are wrong, just that all the responses from posters disagree with the article. Can someone give me the name or title of this law
so that I can refer them to it?
So, the general consensus is that the pensioners who claim this exemption will continue to receive it, and there are no changes proposed to it?
Anything else I should say to them,apart from asking them to check their facts before they scare people?

[masterob]

I have never heard of Round Town News either so that makes two us at least!

[El Cid]

It's some second rate rag on the Costa Blanca.

Sid

[El Cid]

Anything else I should say to them,apart from asking them to check their facts before they scare people?

Don't bother. They will ignore you.

Just wait until the details of the new law are published.

There''s not a lot you can do about it anyway.

Just a philosophical thought - why should pensioners be exempt from CGT just because they are over 65?

Sid

[infoseeker]

Unbelievable!
Suppose you've never heard of Costa Blanca News, Leader, Euro Weekly news, Sol times, either?

[infoseeker]

Anything else I should say to them,apart from asking them to check their facts before they scare people?

Don't bother. They will ignore you.

Just wait until the details of the new law are published.

There''s not a lot you can do about it anyway.

Just a philosophical thought - why should pensioners be exempt from CGT just because they are over 65?

Sid

Take it you're not a pensioner then?
Got to have some perks! Precious few here!

[El Cid]

Lots of people ignore all these rags - they are just full of unsaleable, overpriced property and hundreds of ads for UK TV systems. They rarely contain any accurate news.

I'd rather read the DM - heaven forbid!

Sid

Ps. I do pick them up occasionally when I need something to light the wood burner.

[El Cid]

Take it still not a pensioner then?
Got to have some perks! Precious few here!

Yes, I am a pensioner. Actually I retired early 21 years ago.

As for perks, I haven't had to pay tax on my UK private pension ever since I came to Spain. No complaints there!

My point was, why should pensioners be exempt from CGT- they aren't specifically exempt in the UK.

Sid

[infoseeker]

So what, in the esteemed members or the forum's opinion, is worth reading, to find out what's going on in Spain?
Perhaps we should all read the Spanish version of Hansard!

[El Cid]

This is another article from the same source

http://cincodias.com/cincodias/2014/07/ ... in-url-cds

At the end of the first paragraph, it quite clearly states that the over 65 exemption on the prime residence will still apply.

It is true that there is already an exemption for those over 65 years in the case of sale of their residence. This benefit is maintained and, in this case, it is not necessary to reinvest the proceeds in an annuity.

As I read it, the present situation is that if you are over 65, and you sell any assets (second homes, stocks and shares etc) you are liable to CGT like anyone else. The new law proposes to give you the option to reinvest the money in an annuity and take an income from it (which as I keep pointing out, is very favourably taxed).

This seems like a very good idea and is certainly an improvement in the tax situation for over 65s who wish to sell some assets..

The really big potential problem is that the "allowances" or the coefficients allowable against a gain are being scrapped and that may result in a much higher CGT bill, although as Beachcomber pointed out, that is not always the case. However, if the house was bought prior to 1994 it will probably cost more.

But, getting back to the original point, any pensioner selling their primary residence will NOT pay any CGT and will NOT have to reinvest the money in an annuity, so the fact that the notional CGT has increased is not relevant.

[peteroldracer]

So what, in the esteemed members or the forum's opinion, is worth reading, to find out what's going on in Spain?
Perhaps we should all read the Spanish version of Hansard!

Add me to the list of folk never having heard of the RTN - which seems not to be connected to Andalucia anyway.
What should you read? The A.com forum of course, trusting El Cid, Beachcomber and a few select others who have proven themselves over many years. Avoid all newbies.

[Beachcomber]

I managed to delete my own post whilst editing it. The main point was this simulator:

http://cincodias.com/cincodias/2014/07/ ... 43438.html

which, in some scenarios, gives a more favourable CGT result under the proposed new system.

Plusvalía, in this case, refers to the overall gain rather than the municipal plusvaía tax which is something different.

[morlandg]

Syd - I hope this is not too far off-topic but could you advise me where to start looking to buy a very modest annuity here in spain? I'm already retired so it would not be for my pension, I just have a few quid that is gaining no interest in my UK bank.

[El Cid]

I got mine while in the UK.

They are available in Spain, but I have no experience of them. Most banks and insurance companies should offer them - they are "Renta Vitalicias" in Spanish.

Try Googling it for a better idea of what types there are.

Sid

[Beachcomber]

Another outlook on the draft tax law from what I gather is a well respected firm of lawyers and financial advisors from Mallorca:

http://blog.consultingdms.com/en/2014/0 ... form-2015/

the translation leaves something to be desired but there is a more comprehensive PDF in Spanish:

Tax reforms 2015

It states that the exemption for over 65s from CGT is being maintained but, as far as I can see, doesn't mention the need to invest the proceeds in a Spanish annuity.

It confirms that the inflation indexation of the purchase price of properties is being abolished but the CGT rate is being reduced.

It looks as though non-resident imputed tax for European Union citizens is being reduced to 20% in 2015 and 19% in 2016.

Unfortunately my multilingual-lingual wife is away at the moment so I cannot run the Spanish past her and mine comes nowhere near her standard.

[Gasman]

Can someone clarify please - are we talking about exemption for over 65, or for pensioners - what happens for receivers of EU pensions who are not yet 65? eg pensions from France or UK which come in before the age of 65 for ladies. Also what happens to a property that is joint-owned by a pensioner and a non-pensioner, or a 65+ and a 65-??
Thanks

[El Cid]

It's for the over 65s, not for pensioners as such.

If the property is jointly owned, the gain is split so if one party is under 65 the tax will have to be paid on their share.

Sid