Cut in Spain’s Capital Gains Tax To Bolster the Spanish Overseas Investment Market

As of the beginning of this year, Capital Gains Tax (CGT) has been reduced from 35% to 18% for non-residents selling their Spanish property, and this cut is predicted to attract more foreign investors to the Spanish real estate market.

Also, a mature market such as Spain is a good opportunity for a long-term approach to investment. However, it is not the place for ‘flippers’, for those investors wanting to make a large profit, and make it quickly. The profits are to be made by doing careful research into the right area, one where bargains can still be found, and into the right kind of property.

Spain has recently received some controversial press in terms of the property market, with accusations of overpriced property and overdevelopment in some regions and corruption scandals on the Costa del Sol. However, the significant reduction of CGT is sure to appeal to investors who are happy to put their money in a mature and established market that offers a lifestyle that is always in demand.

This cut in CGT is undeniably good news if the UK resident buying in Spain remembers they are still liable for CGT in the UK, which can be 40% after allowances for those paying a higher rate of tax. Any UK resident wanting to keep their Spanish purchase from the tax authorities is highly unwise to do so: the British and Spanish tax authorities now cooperate fully.

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