Buyer’s Q&A
Capital gains tax when you sell your fractional ownership share
Selling a fractional share triggers capital gains tax in the property's country (and potentially the seller's home country) on any gain. The LLC structure means the share is taxed as a corporate-interest sale, not a real-estate sale — usually a tax-simpler outcome.
The short answer: Selling a fractional ownership share triggers capital gains tax on any gain — in the property's country, and potentially also in the seller's home country. Because the share is a membership interest in an LLC (rather than direct real estate), the sale is typically taxed as a corporate-interest disposal. This is often simpler than a direct property sale and can produce a more favourable rate in some jurisdictions. The exact treatment depends on the property country, the seller's residency, and any double-taxation treaty between the two. Always model the CGT impact with a cross-border tax specialist before listing for resale.
The structural picture
Capital gains tax (CGT) on a fractional share sale operates at two levels. The property's country taxes the gain on the corporate-interest disposal under its rules. The seller's home country may also tax the gain under its rules, with credit available for tax already paid in the property's country under the relevant double-taxation treaty.
This is meaningfully simpler than direct foreign property ownership, where the property's country taxes the gain under its real-estate rules (often with elevated rates or longer holding periods to qualify for relief). The corporate-interest framing usually delivers a cleaner, more predictable CGT outcome.
How CGT is calculated
The gain is the sale price minus the original cost basis. The cost basis includes the original share price plus any documented capital additions to the property funded by special assessments during ownership. Sale-related costs (operator resale fee, legal fees) are deductible from the gain in most jurisdictions.
Worked example: a buyer who purchased a 1/8 share for €300,000 in 2026 sells for €360,000 in 2035 with €6,000 in sale costs. Net gain: €54,000. CGT applies to the €54,000 in the property's country and (with credit for that tax) in the seller's home country.
Country-by-country headline rates (illustrative)
| Property country | Headline CGT rate on share sale (non-resident) |
|---|---|
| Spain | 19% on the gain (with some indexation reliefs for older purchases) |
| France | ~36.2% (CGT + social charges), tapering with holding period; SCI interests follow specific rules |
| Italy | ~26% on capital gains for non-resident SRL members |
| Portugal | ~28% for non-residents |
| USA | Long-term federal CGT 15-20% + state CGT (varies); subject to FIRPTA withholding |
| Mexico | ~35% on the gain; lower rates available with documented cost basis |
These are illustrative starting points. Actual rates depend on share-purchase date, holding period, the specific treaty position, and the seller's overall tax situation.
Holding-period taper relief
Some jurisdictions reduce CGT rates the longer the share is held — France's tapering relief, for example, reduces the CGT charge meaningfully for shares held 6+ years. Buyers planning to hold for the long term should factor this into the cost-per-night model.
The home-country tax position
UK CGT: applies to UK-resident sellers' worldwide gains, with credit for foreign tax paid. The UK rate (currently 24% on residential property gains for higher-rate taxpayers) is typically higher than the foreign-country rate, so additional UK CGT is usually due net of credit.
US capital gains: applies to US-resident sellers' worldwide gains. Federal long-term CGT 15-20% plus relevant state tax, with foreign tax credit available for foreign tax paid.
EU residents: most EU countries tax worldwide capital gains for their tax residents, with treaty credits.
What sellers should do before listing
Three things in order. First, gather the documentation that establishes cost basis (original share purchase paperwork, any special-assessment contributions). Second, engage the same cross-border tax specialist who advised on purchase (or equivalent) to model the CGT outcome before listing — bad surprises here are entirely avoidable. Third, factor CGT into the price negotiation when accepting offers.
The losses question
A fractional share sold for less than purchase price produces a capital loss that may be deductible against other capital gains. The exact treatment varies by jurisdiction; a UK seller can typically offset the loss against other UK CGT; a US seller can offset against other US capital gains. Document the loss carefully — the cross-border tax position needs proper paperwork.
Where to find listings with disclosed resale histories
Co-Ownership Property's marketplace includes both new and resale fractional listings with the resale status flagged.