Something that has shocked me about the recent tax changes has been the high degree of retroactivity, taxing people for past behavior that they can no longer change. Normally the idea is that taxation should influence future behavior, and changing the tax liability for decisions already made is counter-productive and arbitrary.
The latest change in the capital gains taxation is significant to anyone considering buying or selling property in Spain. Among the recent raft of tax changes, there is a huge change in the way long term capital gains are treated. In the (now) past, there was a reduction for inflation, with an additional reduction if the property was bought before 1994.
The new law does away with this and applies a very simple non-inflation corrected capital gains calculation. Going forward, it doesn’t really matter that much, since the current inflation rate is low enough not to matter, and the lower overall tax rate evens out everything.
However, if you were a sucker (ie have now been retroactively changed into a sucker) to have bought something in the 1980s and have held onto it, you are going to pay as if the 30%+ inflation during the 1980s never happened if you sell your property after 2014.
CincoDias has a great calculator that will show the difference, which can be huge. For example, if the seller bought an apartment in 1980 for 8 million pesetas (about 200.000 euros inflation adjusted, but 48.000 euros non-inflation adjusted), and sold it today for 300,000 euros, the seller ends up paying 44.000 euros extra in capital gains if they sell it after 2014!
So if a place is listed for 300.000 euros and the end of year is coming up, a long term owner might be willing to sell it for 40.000 under list price rather than waiting for the new year to roll around.
Definitely something to keep in mind if you are thinking of making on offer.