twistedmelon

If you sell a property and pay 3% tax can you reclaim in full or part the tax if:
a) You are not registered for tax here
b) You are registered but don't exceed your tax limit or have it included as part of an income.
e.g. If a UK pensioner resident here paying tax at source in UK and not registered for tax here, will a UK state pension exceed the tax limit here.

Fred James

There is no 3% "tax". It is a retention against CGT due on the sale and it only applies to non resident sellers.

You are obliged to pay the full amount of CGT on the sale. The 3% retention is to cover the situation if the seller "does a runner" and does not pay the tax in full.

If the actual tax due is less than the 3% retention then you can claim back the difference.

As a non resident income tax levels are irrelevant. If you are paying tax in Spain then the 3% retention is irrelevant as any CGT will be paid in full on your annual tax declaration.

Just because your UK pension is having tax deducted in the UK does not absolve you from submitting a Spanish tax return if you spend more than 183 days in Spain in one year. Tax must be paid in Spain and any tax paid in the UK can be deducted from it. There is an exception for UK Crown pensions but a tax declaration will normally still be required to cover the UK state pension.

The fine for not submitting a tax declaration is up to €200 even if no tax is due.

cymruambyth

I beg to differ. As a resident [merely in possession of the green Residencia Certificate], having recently gone through the process of selling, having the 3% retained, purchasing another property and having the 3% refunded, it applies to resident and non resident sellers alike. I understand it does not apply to "Fiscal Residents" however [a process I am currently going through].

Jontee

This is something that has always confused me as I believe you do not pay the tax if you reinvest the whole into a new property within a set time (2 years ??). But how can you do that if the tax man has already taken 3% of the proceeds of the sale?

EsuriJohn

The Green Residencia Certificate has nothing at all to to with Tax or Tax Status. It is mearly a register kept by the national police of who is in Spain for more than 3 months.

Fred James

You only get the reinvestment deal if you are a tax resident. It does not apply to non residents.

It is not a discrimination issue, the special deals (such as no CGT if you are over 65) only apply to your permanent residence and, by definition, non residents cannot have a permanent residence in Spain.

A resident in this context is someone who is submitting an annual income tax return in Spain - the dreaded green form has absolutely nothing to do with tax residency.

twistedmelon

How many expats are registered for tax in Spain and submit a tax declaration? especially those on a pension.
Like everything here it appears to be a nonsense that no one seems to understand. A bank manager, their solicitor, a gestor and the notary office could not agree on this issue let alone joe public.
SPAIN

snikpoh

I disagree entirely. EVERY expat living in Spain SHOULD submit an annual tax form - simple.

The reasons have been discussed before;

• Tax allowances making tax less in Spain for most
• IHT/Spanish succession tax benefits
• CGT benefits

Even if you are on a state pension in UK and, therefore, would pay no tax in Spain, it is sensible to submit a tax return for the reasons given above.

cymruambyth

Am fully aware that the Green Residencia Certificate has nothing to do with Tax or Tax Status, didn't say it was.
p.s. Think you will find it is 3 months and not 30 days!

EsuriJohn

I think you might be surprised I know I am registered for 2 reasons one I am better off alive as a pensioner and two my heirs will be better off when I am dead.

It took a lot of effort to achieve all the necessary paperwork for Fiscal Residency (tax registration in Spain and de-registration in UK)and even more for the Green Cert. That may be because we were determined to do it all ourselves in order to learn and integrate and Residencia required several trips to Huelva as the only place to issue them in this Province (god help those in the Aracenna).

There seem to be a lot of pensioners round here making the effort as well.

cymruambyth

Again, I disagree. I received the 3% refund when purchasing another "main" property whilst simply holding Residencia (Green Certificate - I know nothing to do with tax residency etc so please don't anyone point out the blindingly obvious again). It was not until after receiving the 3% refund that I commenced submitting annual tax returns, which, I am told after submitting them for 3 years (or is it 5?) you become a Fiscal Resident.

As far as I was informed, Fiscal Residents do not have to lodge the 3% with the tax man when selling a property (so the above quote of "You only get the reinvestment deal if you are a tax resident". is not applicable as you wouldn't have paid the 3% in the first place!)

cymruambyth

Totally agree with you and this is exactly what I do. No tax to pay here, but Isubmit the tax return annually in any case.

EsuriJohn

I think you will find you are Tax Resident after 183 days in Spain in any Tax year registered or not. You can accelerate this by deciding to be Tax Resident from day one by submitting Modelo 030 to your local Hacienda office and then submitting a tax return asap after the 1st of May following a complete tax year Jan-Dec. I think the 3% thing applies to all Europeans as long as they re-invest in a main residence in the EU but it does follow that your Spanish house must have been your main residence in the first place.

Fred James

If you read my post you will see that I said that you can reclaim the 3% retention so long as the actual tax due was less than the retention. At that time you were not a tax resident. If you were you would not have had the retention applied in the first place.

You become tax resident in the year that you spend 183 days in Spain and you are deemed tax resident for the whole of that year.

The three year rule applies to your house. It cannot be considered your "habitual residence" unless you have lived in it for 3 years as a tax resident.

For Inheritance Tax purposes if you wish to claim the special allowances that apply in some regions, you will have to have been tax resident in that region for 5 years.

Domino

but they won't because this will bring them to the attention of the authorities as would registering for the expat vote.
to some it is all a joke and wouldnt be bothered about 3%, they arent paying any other taxes anywhere else.