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Estate Agent Home Espana has seen a dramatic increase in people buying Spanish property after the Government slashed Capital Gains Tax.

The new law passed on January 1st this year, halved the amount of Capital Gains Tax (CGT) payable to the government from the profit on a property.

According to Managing Director of Home Espana, Kieran Byrne:
“Spain has always been a firm favorite for people looking to invest in overseas property but the new legislation seems to have evoked a new era of confidence. Property is still affordable in Spain and the recent changes have enabled people to realize the huge investment of Spanish property. Sales in January alone have doubled since the same period last year and enquiries have been phenomenal.”

Previously, non residents were charged a whopping 35 per cent on profits from the sale of property in Spain. This was deemed discriminatory because residents were only liable to pay 15 per cent of the same tax.

The Spanish Government was referred to the Court of Justice by the European Commission over the issue of CGT.

From 1st January 2007, Capital Gains Tax for non residents is 18 per cent. 3 per cent of the declared value of the property is retained at the notary on the day of signing. The remaining amount is deductible with the following year’s tax return. Any expenses incurred during the sale the property, for instance notary and solicitors fees, can be offset against this.

Sales Manager of Home Espana, Jamie Percival has also witnessed a growing trend amongst existing property owners:
“A lot of vendors had been waiting until the new legislation came into force before putting their properties on the market. The reduction in CGT means they are able to sell their properties at lower prices. Home Espana has some fantastic product at the moment, from as little as 90,000 euros. This really is the best time to buy property in Spain.”

The news puts Spain back on the map for one of the favorite destinations for buyers of overseas property.