Reduction in capital gains tax for second properties in Spain
The Spanish government has announced a 50% reduction in capital gains tax on the sale of second properties purchased between now and the end of 2012.
Public Works Minister Ana Pastor – whose department also covers housing – introduced the measures in May this year in order to try to stimulate the sale of second homes in Spain, where thousands of properties lie empty and unsold due to the housing crash in 2007.
The new rules state that those buying a property between 12 May 2012 and 31 December 2012 will only pay tax on half of their capital gain when they later decide to sell the property.
This could mean a massive tax saving for those intending to invest in a second property now, and with a bit of luck will stimulate the market by speeding up the buying process for people who were thinking about buying a second home.
The tax break applies to both individuals and companies, and residents and non-residents alike.
It does not, however, apply to sales between parents and their offspring and nor does it apply to residences that already benefit from a capital gains tax reduction.
The current rate of capital gains tax in Spain is a flat rate of 21% for non-residents, and between 21% and 27% for residents – figures which will be halved for properties purchased now thanks to this new initiative.
Posted on July 6th, 2012 filed under Property and Other News.