# Question property abroad



## xxxxxxxxxxxxxxxenjoylife (Jul 26, 2011)

does somebody know how is the tax situation if i sell my property abroad as a spanish resident and invest in a property here in Spain...the value of the flat was below 50000 Euro 25 years ago...

thanks


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## Chopera (Apr 22, 2013)

enjoylife said:


> does somebody know how is the tax situation if i sell my property abroad as a spanish resident and invest in a property here in Spain...the value of the flat was below 50000 Euro 25 years ago...
> 
> thanks


I'm not a tax expert but I believe that you don't pay tax only if you sell your main residence to buy another main residence. So if your flat abroad hasn't been your main residence for a while you will probably be taxed on the profit. So if you're not yet a tax resident in Spain it might be worth selling the property in the year before you become one. This of course depends on the local tax rules where you are currently resident.


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## gus-lopez (Jan 4, 2010)

Capn Billy will tell you definitely but if purchased before '86 I believe there is a relief of 11% /year on cgt for each year until 1994 (?) . This would make the amount due nil.
& as Chopera said ,if you are rolling it over then none would be payable anyway.


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## xxxxxxxxxxxxxxxenjoylife (Jul 26, 2011)

thanks,very much appreciated your replies..
what a disadvantage to be resident in Spain
in Austria i would not be liable to pay the tax 
since i have the property for so many years

better off not to sale ...


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## xabiaxica (Jun 23, 2009)

enjoylife said:


> thanks,very much appreciated your replies..
> what a disadvantage to be resident in Spain
> *in Austria i would not be liable to pay the tax
> since i have the property for so many years*
> ...


nor here - see the post above yours


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## CapnBilly (Jun 7, 2011)

Yes, its 11.1% for every year owned before 31st December 1994, so if it was bought before December 1986 it would be tax free. The system changed in 1994


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## NickZ (Jun 26, 2009)

When did you become a Spanish resident? Spain shouldn't be using the purchase price unless you were Spanish at the time. You should be taxed on the increase since becoming Spanish.


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## xabiaxica (Jun 23, 2009)

NickZ said:


> When did you become a Spanish resident? Spain shouldn't be using the purchase price unless you were Spanish at the time. You should be taxed on the increase since becoming Spanish.


just to clarify for others - you mean a 'resident of Spain/Spanish resident' as you said in your first sentence

not Spanish as in a Spanish citizen - yes?


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## NickZ (Jun 26, 2009)

Tax resident. I was thinking I should have clarified that when I posted but the mind wanders -(


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## xxxxxxxxxxxxxxxenjoylife (Jul 26, 2011)

i am a tax resident since 4 years...and my property abroad was purchased 1985...so good news
at least something positive ...thanks to all for the excellent post


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## CapnBilly (Jun 7, 2011)

NickZ said:


> When did you become a Spanish resident? Spain shouldn't be using the purchase price unless you were Spanish at the time. You should be taxed on the increase since becoming Spanish.


NickZ I'm not sure that's correct. Can you pint me to the source of your information.


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## NickZ (Jun 26, 2009)

He should have had a deemed disposition when he left his previous country. Paying any due taxes then.

I'll try and look things up but it would be strange for Spain to tax him on a gain that didn't happen while he was a Spanish tax resident. All that does is encourage people to sell everything and buy it back.


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## NickZ (Jun 26, 2009)

http://www.pwc.com/en_US/us/tax-ser...tax-newsalert/assets/pwc-spanish-exit-tax.pdf

That's the nearest thing I could find on Spain. Maybe somebody could search in Spanish.

Under that law Spain was charging capital gains on people leaving Spain. Even if the asset wasn't sold. Basically declaring a deemed disposition. It would be strange if the same principle didn't apply to people entering Spain.


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## xabiaxica (Jun 23, 2009)

NickZ said:


> http://www.pwc.com/en_US/us/tax-ser...tax-newsalert/assets/pwc-spanish-exit-tax.pdf
> 
> That's the nearest thing I could find on Spain. Maybe somebody could search in Spanish.
> 
> Under that law Spain was charging capital gains on people leaving Spain. Even if the asset wasn't sold. Basically declaring a deemed disposition. It would be strange if the same principle didn't apply to people entering Spain.


if you're moving to Spain & sell a property before you move here & become fiscally resident in Spain, then Spain cannot charge you any CGT - simple


you would of course have to pay anything due in the country in which you _were_ fiscally resident at the time of the sale


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## NickZ (Jun 26, 2009)

Yes but it's not unusual for a country to consider something sold when you leave the country. Even if you don't sell the property. The law in the link I posted was basically that. Spain considers the property sold if you stop being a tax resident.


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## CapnBilly (Jun 7, 2011)

Yes, but the link you have posted to relates to corporate assets, not personal. On that basis, someone who returned to the UK would have to pay capital gains at the time they left, and that is not the case, nor do they have to when they leave the UK. That's not to say there won't be any capital gains due in the other country, which under the DTA can be offset.


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## NickZ (Jun 26, 2009)

https://www.kpmg.com/US/en/IssuesAn...nternational-executive-alert-2012-150-aug.pdf

Here individuals.

It did tax unrealized gains on leaving Spain. What the court blocked was the requirement to pay for this at the moment of leaving.

Nothing to offset under the treaty. You just get a new cost basis.


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## CapnBilly (Jun 7, 2011)

NickZ said:


> https://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/flash-international-executive-alert/Documents/flash-international-executive-alert-2012-150-aug.pdf Here individuals. It did tax unrealized gains on leaving Spain. What the court blocked was the requirement to pay for this at the moment of leaving. Nothing to offset under the treaty. You just get a new cost basis.


 IInteresting post NickZ, thanks for the link. If you actually read the judgement it's clearly stated by Spain that the law doesn't relate to unrealised capital gains, only to income which has already been realised, so it doesn't apply as far as property is concerned, and in fact, if you think about it, that's logical, because Spain has a system of retention for non-residents anyway. In addition, as I read the tax law, the capital gains on selling property is based on the date of acquisition, there is nothing about the date you entered the country, although, as I said before there may be capital gains in the country of location. As far as the UK is concerned, its the date of disposal, so this would be offset, but may be, and probably is, far less than than Spain charges. I have no idea as far as Austria is concerned.


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## xxxxxxxxxxxxxxxenjoylife (Jul 26, 2011)

declaration of overseas assets any news on this subject ?

in one of the local free newspapers in Marbella i read
that some lawyers and real estate agents asking to
reform his new laws...since people moving away..for
example to Portugal etc


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