A welcome change to the structure of the Spanish tax system will work to the advantage of Britons living in Spain as expats, according to Banco Halifax Hispania.
Capital gains tax on property sales and personal income for non-residents in Spain will fall by almost a half from 35 per cent to 18 per cent come New Year's Day.
The tax rate was cut dramatically after European courts upheld a complaint that it was unfair to charge non-residents almost double the Spanish resident rate (18 per cent).
"This is fantastic news for Britons living or working temporarily in Spain," remarked Ian Smith, head of European operations at Halifax.
Recent research from Mintel finds that 800,000 Britons now own a home abroad, 45 per cent more than two years ago, and Spain is by far the most popular location.
Spain has traditionally been seen as a top spot for post-retirement relaxation – but the new tax structure will not affect over 65s who have lived in their Spanish home for three years, who are already exempt from capital gains tax.To find out more about mortgages, click here.
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