IN today’s article, we are going to review the taxes on the sale of furnished properties. The sale of furnished properties is really common, but the parties, buyer and vendor, often do not know if the value of the property should be separated from the value of the furniture and what the tax consequences may be.
In the purchase and sale of real estate or moveable assets, the acquirer or buyer must pay this tax.
It is essential to know that it depends on each autonomous community (Spanish region). For example, in the Valencian Community, this tax is regulated by Law 13/1997 in article 13.
Thus, in the Valencian Community:
.- In the sale of real estate properties, the buyer will normally pay 10 per cent of the purchase price by way of Transfer Tax.
.-This is however reduced to 8 per cent in the case of acquisition of an habitual residence by people under 35 years of age (depending on their income).
.- It can be reduced to a minimum of 4%, in the case of purchase of what are known as official protection properties under the special regime, especially in the purchase of a habitual residence by large families, the disabled or other specified cases.
However, it is established that as a general rule, 6 per cent will be paid in the acquisition of movable property such as furniture.
Conclusion: being that generally, the buyer will pay 10 per cent for transmissions tax in the purchase of a property; It may be convenient to state that part corresponds to furniture (6 per cent) which could result in some saving of tax.
3 per cent retention
In the case of a sale by a non-tax resident of real estate, the buyer must retain 3 per cent of the price and pay it on account, as part of the seller’s income tax.
This withholding does not in itself imply an expense or tax. Only a retention. In any case, it only applies to the sale of non-moveable properties. Therefore, it is not necessary to retain any money, in connection with the furniture.
Capital gains Tax
In relation to the capital gain of Non-residents, we understand that, in principle, there could be no difference.
All of this is according to Law 5/2004 of Non-Resident Income Tax.
In its article 25, it is stated that there is a 19 per cent for capital gains made as a consequence of the transfer of assets. We understand it would apply to both real estate and personal-moveable property.
Although it must be taken into account that there could be an exemption (art. 14.1.c) in the payment in respect of capital gains; in the sale of movable property by tax residents in the European Union or member state of the European Economic Area.
If you have questions about the taxes on the sale of furnished properties, or the purchase or sale of properties Spain, contact us or you can obtain more information in our real estate services section on this website.
The information provided in this article is not intended to be legal advice, it merely conveys information related to legal issues.
Carlos Baos (Lawyer)
White & Baos
Tel: +34 966 426 185
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