Paying tax is one of those ugly things in life that are almost never avoidable! Even though you may be liable to pay Capital Gains tax on your property when you sell, there are ways to bring that tax bill down.
Property prices are low right now. It’s a great time to buy! But any profit you’re going to make, means you could be hit for Capital Gains tax when you’re ready to sell in the future.
Here’s one simple way of making sure any future Capital Gains tax will be as low as possible.
KEEP ALL YOUR RECEIPTS! Yes, it’s that simple!
Upon completion of a sale if you can provide any receipts, for example, renovation work, upgrades, air conditioning units, etc. the Inland Revenue will take your investments into consideration when calculating your Capital Gains Tax bill. The receipts must be official though. No handwritten notes with “paid in full!” They must have the word “factura” (invoice) on the top, and have the trade company’s tax number and their company stamp for them to qualify.
So remember when purchasing a property, keep a separate file, and every time you’re spending on your home throughout the years, throw the “Factura” in the file! You’ll be glad you did!
Ready to buy a home in Spain? Before you start your property search, head to www.BuyMyHomeInSpain.com to download my complimentary “2021 Spanish property buying guide!”