27% tax on house sales

sweet sensation

sweet sensation

Active Member
I have been told that if you sell a house in the UK the same year that you move to Ibiza then the Spanish Authorities are entitled to take 27% of the money you get from this? Can anyone please give me more information on this please? For some stupid reason the enter button doesn't work when I post on this forum so I cant make new paragraphs?????!!! Thanks
 
my advice would be to see an accountant who knows about double taxation agreements between the uk and spain and run your plans past him/her.
 
yep it's true, all I can say is if you have moved to Ibiza in the same year as selling your Uk home then you are potentially in the sh*t, or if you have moved to Ibiza and have you Uk home up for sale , you are equally in the s*it. Its ok if you havent made any dosh on your home in the Uk but if you have then you have a problem. This year I got my son into school in Ibiza (he loved it) with my daughter following, we were very committed to moving full time until we discovered the rules and have now delayed. Now we are back in the uk until we are able to move without the potential of Hacienda wanting to collar us.

I am only telling my own side as I am a brickie, not an accountant so you should make your own investigations. The double tax agreement between spain and the Uk is available to read online from HMRC.com and you should concentrate on the capital gains section and the tie breaker rules for residency, those are the important bits. Biggest problem with the tie breaker rules (there are 4) is the center of vital interest one, it isn't definitive as to where your centre of vital interest is, so if you get that far down the list of tie breaker rules you could be in trouble.

Not sure of the rate of tax but it must start at around what you said, could be higher.
 
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it's very simple. people are taxed on the money they or their assets earn in a year. if you live in spain in a financial year you have to pay tax on your income no matter where it was earned ie over the internet in your business which may be based in Britain or new York, or from your dealings on the hong kong stock exchange, or the sale of a big house in California or a garage in Shoreditch. I assume you're a tax payer in Britain, if you sold your luxury pad in cap martinet to david villa last week, you'd be paying capital gains tax on the profit wouldn't you?
 
sorry ive not been on for a while, lots of laptop problems. my mil was a solicitor and she has a rental property business and she was baffled by this. I have no idea about this sort of thing so this might as well be written in chinese to me!!! she did tell me that we will be paying capital gains tax on the property when we sell it in the uk so why do we have to pay it in spain aswell??!

I will check out that forum when i get a chance, im due to have a baby in a week so other priorities have taken over for now!

To the people who have moved from the uk how did you get around this if you sold a house to move to ibiza?
 
riddle me this? if you wanted to make an injury claim, sort out a messy divorce or buy a house would you ask an accountant for advice? you won't be paying cgt on your house in the uk, because it's your only residence - that's the rule there, but in spain you do pay cgt on your house, so your mate is wrong already. please take some proper advice from a professional who specialises in the area you have problems.
 
stephen said:
riddle me this? if you wanted to make an injury claim, sort out a messy divorce or buy a house would you ask an accountant for advice? you won't be paying cgt on your house in the uk, because it's your only residence - that's the rule there, but in spain you do pay cgt on your house, so your mate is wrong already. please take some proper advice from a professional who specialises in the area you have problems.
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mil = mother in law and shes very qualified and has her own accountant! its not the only residence though, its a property that has been left in a will but we are being given it before the death which is why, apparantly we have to pay capital gains?

when we finally get to do this we will obviously get professional advice from someone who knows about spanish law etc but i thought this forum was all about like minded people finding out and discussing situations that others have already experienced and can offer help and advice in? :roll:
 
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rewdan said:
yep it's true, all I can say is if you have moved to Ibiza in the same year as selling your Uk home then you are potentially in the sh*t, or if you have moved to Ibiza and have you Uk home up for sale , you are equally in the s*it. Its ok if you havent made any dosh on your home in the Uk but if you have then you have a problem. This year I got my son into school in Ibiza (he loved it) with my daughter following, we were very committed to moving full time until we discovered the rules and have now delayed. Now we are back in the uk until we are able to move without the potential of Hacienda wanting to collar us.

I am only telling my own side as I am a brickie, not an accountant so you should make your own investigations. The double tax agreement between spain and the Uk is available to read online from HMRC.com and you should concentrate on the capital gains section and the tie breaker rules for residency, those are the important bits. Biggest problem with the tie breaker rules (there are 4) is the center of vital interest one, it isn't definitive as to where your centre of vital interest is, so if you get that far down the list of tie breaker rules you could be in trouble.

Not sure of the rate of tax but it must start at around what you said, could be higher.
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Thank you for your advice and experience :)
 
sweetie, we're essentially a holiday forum where i'm certain you'll find great advice on which beach to go to, who's a great dj and where to find workers' accommodation etc. i'm also certain you will not get a definitive answer to your question - eg rewdan's answer tells you nothing on cgt that you didn't already know - so my advice once again is to get an appointment with an accountant who specialises in English/Spanish double taxation agreements - surely that's better than not knowing anything or basing your future on what someone you met at the bus stop (like my mil does) has told you?
 
stephen said:
sweetie, we're essentially a holiday forum where i'm certain you'll find great advice on which beach to go to, who's a great dj and where to find workers' accommodation etc. i'm also certain you will not get a definitive answer to your question - eg rewdan's answer tells you nothing on cgt that you didn't already know - so my advice once again is to get an appointment with an accountant who specialises in English/Spanish double taxation agreements - surely that's better than not knowing anything or basing your future on what someone you met at the bus stop (like my mil does) has told you?
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god youre so patronising!!!!

im not basing my future on what someone at a bus stop or on this forum tells me, i just like to find out about other peoples experiences which may be similar to ours so when the time comes we are armed with lots of different information. i also think its a good way to get talking to people who will have been or are going through the same thing as yourself in order to build future friendships when we do eventually live in ibiza. if i didnt ask questions or talk to people on here i would (at this present point in time) have been oblivious to the 27% tax on house sales and seeing as we plan to move to ibiza this time next year having that information has been invaluable as we now have to make sure that our house sale happens this year or in some other way so we dont get 'stung' for this ridiculous way of the government taking money off you!
 
call me whatever you will, but I've given you the best advice here and i'm sure you'll be getting the ale in for me in gratitude when you do arrive.
 
stephen said:
riddle me this? if you wanted to make an injury claim, sort out a messy divorce or buy a house would you ask an accountant for advice? you won't be paying cgt on your house in the uk, because it's your only residence - that's the rule there, but in spain you do pay cgt on your house, so your mate is wrong already. please take some proper advice from a professional who specialises in the area you have problems.
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Couldn't agree more with this. One thing to look into - are there not provisions whereby if any gain on the sale of your main residence is reinvested into another residence within a specified period of years then the gain is exempted from tax in Spain even if you are assessable there ?

I believe Portugal got hauled over the coals on this by the EU because they used to only apply these provisions in circumstances where a gain was reinvested in a residence in Portugal and were compelled to extend those provisions to reinvestment of gain in another main residence within the EU. How these sorts of provisions might apply in circumstances where a Spanish property was purchased prior to sale of a UK residence or move to Spain is a specialist area and would depend on individual circumstances so you need a reliable accountant/tax lawyer in Spain and a competent UK accountant.

Also make yourself aware of the start and end dates of a "tax year" in both countries ;)
 
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