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3% retention tax- House sale

3% retention tax- House sale

Old May 4th 2018, 11:41 am
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Default 3% retention tax- House sale

To avoid having to forego the 3% retention tax when selling your property I believe the seller must be tax resident.

My quetion is -do you also have to have residencia- or is tax resident ( and up go date with all taxes/ returns) sufficient
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Old May 4th 2018, 12:01 pm
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Default Re: 3% retention tax- House sale

Originally Posted by Dondurma View Post
To avoid having to forego the 3% retention tax when selling your property I believe the seller must be tax resident.

My quetion is -do you also have to have residencia- or is tax resident ( and up go date with all taxes/ returns) sufficient
it is really the latter - you will need a certificate from Hacienda confirming you are tax resident and your tax payments are up to date. The Notario will need to reflect this in the Escritura
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Old May 4th 2018, 1:20 pm
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Default Re: 3% retention tax- House sale

Seems like a lot of hassle.

If you don't make a profit the 3% retention can be reclaimed.
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Old May 4th 2018, 1:35 pm
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Default Re: 3% retention tax- House sale

Cheers folks

I understand it can be reclaimed but that takes around 12 months!!!!
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Old May 4th 2018, 3:16 pm
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Default Re: 3% retention tax- House sale

Originally Posted by Dondurma View Post
Cheers folks

I understand it can be reclaimed but that takes around 12 months!!!!
Don't know who told you that? I believe it normally takes 3-6 months.
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Old May 4th 2018, 3:31 pm
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Default Re: 3% retention tax- House sale

Not in Valencia region!!

6-12 months
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Old May 4th 2018, 3:31 pm
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Default Re: 3% retention tax- House sale

'My quetion is -do you also have to have residencia- or is tax resident ( and up godate with all taxes/ returns) sufficient'

How can you be one without the other?
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Old May 4th 2018, 3:43 pm
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Default Re: 3% retention tax- House sale

Easily

If your'e in Spain in excess of 183 days in a year you are tax resident.

Residencia however is required after 90 CONSECUTIVE days ( leave on day 89 and for residencia the clock restarts, but for tax residency its cumulative)

Hence you can be tax resident but not require residencia

Last edited by Dondurma; May 4th 2018 at 3:49 pm.
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Old May 4th 2018, 4:39 pm
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Default Re: 3% retention tax- House sale

Agreed. But what are the benefits of being tax resident but not having residencia?
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Old May 4th 2018, 4:44 pm
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Default Re: 3% retention tax- House sale

For me being tax resident is financially to my advantage

As my pension is protected Crown income I do not get taxed in Spain- whereas being tax resident I do not have to pay non resident owners tax

The residencia aspect is of little value to me
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Old May 4th 2018, 4:48 pm
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Default Re: 3% retention tax- House sale

OK thanks for explaining and sharing. Just interested in case I was missing a trick.
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Old May 4th 2018, 6:39 pm
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Default Re: 3% retention tax- House sale

Originally Posted by Dondurma View Post
For me being tax resident is financially to my advantage

As my pension is protected Crown income I do not get taxed in Spain- whereas being tax resident I do not have to pay non resident owners tax

The residencia aspect is of little value to me
You are now obliged to declare your Crown pension in Spain. It may affect the tax you pay on any other income.

Are you saying that you never spend more than 90 days in Spain. If you do, you are legally obliged to register. After Brexit you may find that living in Spain without the necessary paperwork could cause problems.

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Old May 4th 2018, 6:53 pm
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Default Re: 3% retention tax- House sale

90 CONSECUTIVE days, no I dont

As regards what amounts to a yearly nil return- cheaper than non resident tax

As regards Brexit........Irish!!!!!
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Old May 4th 2018, 7:32 pm
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Default Re: 3% retention tax- House sale

Lucky old you!
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