EU action over unfair property tax

[fifi]

Spain facing EU action over 'discriminatory' property tax


People planning to sell property in the Canaries with a view to a move elsewhere will be interested to know that the EU is to take legal action against Spain over its unfair capital gains rules, which penalise non-residents.

The European Commission has decided to refer Spain to the EU's Court of Justice for discriminatory real estate tax rules that prevent non-residents from enjoying the same tax benefits as residents. According to Spanish legislation, capital gains from the sale of a permanent residence are exempt from tax if the money is used to buy another permanent residence. However, this provision only applies to Spanish residents, therefore discriminating against non-residents who can end up paying much higher taxes. In practice if a person living in Spain sells their permanent residence to buy a new house and move to another Member State, they are taxed on the capital gains made on the sale. Conversely, if they stay in Spain and buy a new house here, no tax would be applied. The Commission considers that this is an obstacle to the free movement of persons, workers and self-employed persons and therefore breaches the EU Treaties.

[yoyo]

Thank you Fifi for this info and all other info. I've only became a member today but I have been browsing this forum for a long time thanks to you.

[Ivemovedon]

All those non resident owners paying the non rental tax should take note. The locals don't pay a tax if they don't rent out their property, why should you. Always thought the EU would catch up with Canarian discriminatory taxes sooner or later. Its about time they actually did something worthwhile.

While they're about it they might want to take a look at the persecution of people trying to rent their own property

[woe10]

Thank you Fifi for this info and all other info. I've only became a member today but I have been browsing this forum for a long time thanks to you.

Hola YoYo,  Welcome to the Forum, hope you also enjoy some of the non-serious "Banter" along the way 

[yoyo]

Thanks Woe 

[fifi]

Welcome to the Forum Yoyo.

[SheilaW]

There's something here I can't get my head round.

Doesn't the fact that you're considered "non-resident" somewhere mean that that isn't where youy main residence is? For example: You are resident in country A, where you own a home, and you choose to buy a second home, in country B. Although the home in country B is permanent, it isn't your "principal abode" or whatever you call it in English legalese. If you're resident in London, with a holiday home in Devon, don't you have to pay capital gains if you sell the Devon place? OTOH, if you sell the London place to move to Manchester, then you don't expect to pay tax, do you? One's a necessity and the other's a luxury, investment or whatever else you like to call it. I'm sure that's the way UK tax laws were when I left there many years ago, and it's certainly the way things are in France today.

What's different about the way the Spanish are dealing with CGT? They aren't saying "one rule for the Spanish; another for foreigners" are they? I read it as "one rule for home N° 1; another for homes N° 2+". I own a house in France that I wouldn't have paid tax on if I'd stayed there, but I'm resident is in Spain now so I'll no doubt have to pay tax on the French sale at some time. But I could sell my Spanish house without paying CGT, couldn't I?

Dhh! I never understood tax in the UK, but it gets impossible when you keep moving country.

[potash]

You forgot to mention how they discriminant over inter island travel too.

[Brightspark]

The Spanish are a racist bunch, and this isn't just at an average "Jose" level, it goes for the councils and governments too.

One day they will realise that they need tourism from foreigners.

[Ivemovedon]

amen to that.