Declared Value
Jan 28th 2006, 2:03 pm
#16
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Joined: Aug 2004
Location: Albuñol. Granada
Posts: 1,532
Re: Declared Value
Sorry, I may have caused confusion when I said with each house we sold we agreed to fixtures and fitting I was referring to UK, not here, Sorry for confusion. I have heard of it happening here though.
Very wet, cold, what had happened to my sunshine!!!!!
Very wet, cold, what had happened to my sunshine!!!!!
Jan 28th 2006, 7:32 pm
#17
Lost in BE Cyberspace
Joined: Jun 2005
Location: Puente Esuri
Posts: 6,903
Re: Declared Value
Hi *nod*,
I understand that after repeated representation by the European Commission and no action by the Spanish government it was referred to the European Court of Justice on the 19th January. If the Spanish drag it out it could go on for a year or two yet but they will probably fall in line if the ruling is against them.
Regards,
John.
I understand that after repeated representation by the European Commission and no action by the Spanish government it was referred to the European Court of Justice on the 19th January. If the Spanish drag it out it could go on for a year or two yet but they will probably fall in line if the ruling is against them.
Regards,
John.
Originally Posted by Unexpat
*nod* As it so happens the EU commission are upholding a complaint against the Spanish givernment against these unfair and discriminatory differentials, since they restrict/limit the ability of EU individuals to move freely across member states. I would not be surprised to see this change for EU nationals,, but remain as is for others. So we may just see a European Court Ruling on this, at some stage.
Jan 29th 2006, 2:58 pm
#18
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Joined: Sep 2004
Posts: 584
Re: Declared Value
Originally Posted by Nige
I think this is a rational message and can't find fault with it. I think that for any 'foreigner' coming to live in another country and not aware of the language and customs and years of gradual change, it is sometimes difficult to accept things as they are. Frankly the differential taxes paid by Residents and Non-Residents for CGT is odd and should be changed. However, this is all a question of balances and where the Government's Income should be obtained and how easy it is.
The Spanish Government benefits greatly from the increasing values of properties. In many areas, they have risen by much more than 10% per annum. By leaving the tax payable on the sale of a home as the same percentage, and assuming the level of sales/purchases remains static, then the Government will derive at least 10% MORE income purely by house price inflation year on year. A nice extra 'earner' don't you think?
Taking this to a more extreme case. If every Spaniard or foreigner selling/buying his/her home during 2006 entered in the Escritura the precise exact amount paid for the home. I would imagine that the Spanish Government would face a BONANZA (rich pocket) of funds that would embarrass them. :scared:
I sometimes wonder how many foreigners with Non Resident properties in Spain actually declare their exact and true level of rental incomes to the authorities. Even if they do not let out their places, they are still required to complete the annual tax declaration and pay an annual tax. I wonder if Mitzipurr could get on her soapbox about all those illegal tax avoiding foreigners enjoying Spain and its' infrastructure including roads and airports and lighting and cleaned beaches and police service and emergency services and hospitals etc etc ?? And think that it is their right to enjoy the country without contributing a sausage ?
The Spanish Government benefits greatly from the increasing values of properties. In many areas, they have risen by much more than 10% per annum. By leaving the tax payable on the sale of a home as the same percentage, and assuming the level of sales/purchases remains static, then the Government will derive at least 10% MORE income purely by house price inflation year on year. A nice extra 'earner' don't you think?
Taking this to a more extreme case. If every Spaniard or foreigner selling/buying his/her home during 2006 entered in the Escritura the precise exact amount paid for the home. I would imagine that the Spanish Government would face a BONANZA (rich pocket) of funds that would embarrass them. :scared:
I sometimes wonder how many foreigners with Non Resident properties in Spain actually declare their exact and true level of rental incomes to the authorities. Even if they do not let out their places, they are still required to complete the annual tax declaration and pay an annual tax. I wonder if Mitzipurr could get on her soapbox about all those illegal tax avoiding foreigners enjoying Spain and its' infrastructure including roads and airports and lighting and cleaned beaches and police service and emergency services and hospitals etc etc ?? And think that it is their right to enjoy the country without contributing a sausage ?
Nige as usual your post is spot on. However the reason "I am on my soapbox" as you put it is this. For over ten years I worked in a senior position for the Inland Revenue. I am well aware of the pitfalls and penalties that fiddling the tax man can lead to. You only get away with it for so long and believe you me it can and has ruined many peoples lives. Speaking for myself if I cannot buy a house with a clear conscience in Spain then I will move on. Times are changing in Spain and the old ways will disappear forever and then what?
Oh and by the way I am resident and always have been whilst living here, pay my taxes and are registered at the townhall. I also think you will find that most of the major roads constructed recently in Spain and a lot of other major projects have been funded by the EEC.
Last edited by mitzipurr; Jan 29th 2006 at 3:08 pm.
Jan 30th 2006, 4:28 pm
#19
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Joined: Jan 2006
Posts: 394
Re: Declared Value
Originally Posted by mitzipurr
I also think you will find that most of the major roads constructed recently in Spain and a lot of other major projects have been funded by the EEC.
Returning to the question of under-declaration, prior to entry in the Euro, Spain had 3 billion pesetas (£12,000,000,000) of Black Money (dinero negro), of which one third was estimated to be crime/narcotics related, leaving 2 billion pts in the hands of the general population. The 3 billion pts represented around 40% of the cash in circulation, according to some estimates.
Around 1998, a European commision study estimated that cash-in-hand work was between 10% and 23% of GDP.
The problem for the government, with the introduction of the Euro looming, was how to integrate the economy in such a way as to minimise the impact. An outright amnesty (although previously tried with some success) could have undesired fall-out in terms of inflation and would run the risk of opening the money-laundering gates to crime related money.
The alternative, was to continue with the current legislative regime and practices, whilst gradually tightening-up on the rules, over an extended period of time. This would then permit black money to partly fund the purchase of investment property, bringing those assets into the system and after sufficient years had elapsed to minimise taxation issues on disposal, the value of the asset could then be realised.
One assumes that this would then allow time for markets to balance and legislation to evolve as necessary to bring things into line with the EEC.
So what I posted earlier still stands. It is up to each individual to assess their liabilities and declare accordingly, bearing in mind that the end-game is the complete elimination of the black economy at some stage in the near future, as far as is possible.
In the interim, although the government will not acknowledge it, nor condone it, they have undoubtedly (in my opinion) turned a blind eye to certain practices to achieve the aforementioned objectives.
What would be interesting, would be to see what the estimates of the "submerged" economy are now, a few years down the line.
