Non-resident Spanish property owners boosted by capital gains tax cuts
Non-resident owners of Spanish properties have been handed a boost after the announcement of a reduction in capital gains tax, which had previously been charged at a higher rate for foreigners buying real estate.
This means that overseas property investors operating in Spain will be able to take home a larger cut of any profits made on the value of their property investment, since the new tax rules afford them the same tax rights as Spanish citizens.
The introduction of the new legislation allows Spain to meet European standards regarding property taxation across the EU.
Capital gains tax for non-residents will now be charged at 18%, in common with Spanish residents, rather than the previous 35%.
Furthermore, withholding tax, which acts as a guarantee for the Spanish government that the capital gains tax will be paid by non-residents selling their assets in the country, will be reduced from 5% to 3%.
A recent report from one property index revealed that average Spanish real estate prices increased during the first months of 2007.
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