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Non-residents will not pay municipal capital gains when selling their property

Non-residents will not pay municipal capital gains when selling their property

The Spanish Government modified in 1999 the regulation of municipal capital gains, the tax that is paid when selling a property and since those not nationalized in Spain and non-residents in our country are released from the declaration of this tax.

However, the state transfers this obligation, by law, to the buyer.

Payment of municipal capital gains

The law that regulates this tax is the Ley de Haciendas Locales, which says that the person who must pay the municipal capital gains is the seller of the house, but if the seller is a non-resident foreigner in Spain, he is exempt and the The obligation to pay falls on the buyer, who must pay said tax to the Town Hall where the property is located.

Even if it was the buyer who paid the municipal capital gains, it should be noted that what was paid can be recovered by him. The General Tax Law (LGT) itself allows you to demand the reimbursement of municipal capital gains from the non-resident seller.

But it is even possible that the non-resident is not willing to return the amount of the capital gain to the buyer and that it must be claimed through the courts. It is highly advisable to agree in the deed of sale of the property the way in which the buyer can be compensated and thus avoid judicial proceedings.

How to compensate the buyer for the payment of the municipal capital gains

Including a clause in the contract that allows the buyer to somehow recover the payment of this tax. However, the buyer will not be released from his obligation to declare or self-assess the tax and pay it even if the seller has not complied with the compensatory payment to the buyer.

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