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As a non-resident, how much tax will I pay when sell my property?

Tax Law

Antonio Flores Vila

30th of April 2000

Q. I am about to sell an apartment that I have owned for 11 years. I understood that no plus valia was payable over 10 years ownership (i.e. 0%) but somebody has told me that this law has changed and that 35% is now payable on sale for non-residents. I would be very grateful for an up-to-date appraisal of the present situation.

    A. The plusvalia is payable regardless of the number of years owned. In fact, the more years of ownership the more you pay. This tax is a local tax and it is levied on the increase of the value of the land over the passing of time. This tax reaches its maximum at 20 years of ownership, when it is capped.

    I suppose you refer to Capital Gains Tax of non-residents. The ten years count backwards as of the 31 Dec 1996. Therefore, effectively, if you have owned your property since before the 31 of Dec. 1986, then you are not liable for any Capital Gains. But there are also deductions: for every year you have owned your property counting from 1994 backwards you will be able to deduct 11.11% on the gain. For example, is you purchased in 1992, then you will pay 35% tax on the net gain reduced by 22.22%.

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