bumble17571

Impuesto sobre el Patrimonio (Wealth Tax).


Forgive me if this has been touched on before but I did a search throught the forum and couldn't find any reference.

As I understand it this is a tax on an individuals largest asset namely their property.

I have searched on the net for info on the above tax and found the usual ambiguous info which whilst informative has left unanswered questions.
I tried www.spainlawyer.com and also the website of the Ministry of Economy
(Ministero de Economia y hacienda) www.aeat.es There is a section for non Spanish residents in English.
After all that,I thought I would ask on this forum for first hand experience.

I understand that a tax return shold be completed and the amount of tax due is calculated from info given on the return.
Firstly,Is the return sent to an individual (a la U.K.) or must they request one?
If they must request one,where from?
For the purposes of tax calculations, the value of the property is taken as the cadastral value (apparently shown on the IBI contributions receipt).
How does this value differ from the actual value?

If anybody has any first hand experience of this and can offer more information, I would greatly appreciate it.
Thanks

EsuriJohn

Hi bumble,

I have no personal experience yet, but I have bought about 6 books on buying, living, and working in Spain and they all differ slightly on this but the two most reliable in this area Blevin "Living in Spain" and Searl " You and the Law in Spain" both agree that you are taxed on all your Spanish assets and your Bank will inform the tax office of your balance automatically.

There are no allowances for non-residents but it only calculated on your Spanish assets. The form 214 has to be completed and returned at any time for the asset value of the previous year.

Regards,

John.


QUOTE=bumble17571]Impuesto sobre el Patrimonio (Wealth Tax).
Forgive me if this has been touched on before but I did a search thought the forum and couldn't find any reference.

As I understand it this is a tax on an individuals largest asset namely their property.

I have searched on the net for info on the above tax and found the usual ambiguous info which whilst informative has left unanswered questions.
I tried www.spainlawyer.com and also the website of the Ministry of Economy
(Ministero de Economia y hacienda) www.aeat.es There is a section for non Spanish residents in English.
After all that,I thought I would ask on this forum for first hand experience.

I understand that a tax return should be completed and the amount of tax due is calculated from info given on the return.
Firstly,Is the return sent to an individual (a la U.K.) or must they request one?
If they must request one,where from?
For the purposes of tax calculations, the value of the property is taken as the cadastral value (apparently shown on the IBI contributions receipt).
How does this value differ from the actual value?

If anybody has any first hand experience of this and can offer more information, I would greatly appreciate it.
Thanks [/QUOTE]

bumble17571

[/QUOTE]


Thanks for your reply John.
Well so far this is as clear as mud.Today I met up with three of my Spanish neighbours and each of them told me that they don't pay this tax!
It appears they are not aware of any such tax rather than choosing not to pay it, stating the usual "Tranquilo tranquilo, no passa nada"
I also spoke with an English friend who has been in Spain for 5 years and she told me she padi it after the first year but after she got her residency her solicitor (Spanish) told her "not to bother paying it"!
Seems the investigation will be ongoing

EsuriJohn

Hi bimble,

No! I think they are all correct but for different reasons. The allowances for Spanish residents are quite high and with the usual form of house ownership in Spain for a couple the tax would not kick in until you shared a property worth about 500,000 euro.

For your English friend in the first year she was not a fiscal resident so had no allowances therefore she paid the tax. After she became a fiscal resident the allowance moved her out of the tax net

Both Blevin and Searl give good examples in each case to illustrate this.

Regards,

John.

Thanks for your reply John.
Well so far this is as clear as mud.Today I met up with three of my Spanish neighbours and each of them told me that they don't pay this tax!
It appears they are not aware of any such tax rather than choosing not to pay it, stating the usual "Tranquilo tranquilo, no passa nada"
I also spoke with an English friend who has been in Spain for 5 years and she told me she padi it after the first year but after she got her residency her solicitor (Spanish) told her "not to bother paying it"!
Seems the investigation will be ongoing[/QUOTE]

Cptnemo

Thanks for your reply John.
Well so far this is as clear as mud.Today I met up with three of my Spanish neighbours and each of them told me that they don't pay this tax!
It appears they are not aware of any such tax rather than choosing not to pay it, stating the usual "Tranquilo tranquilo, no passa nada"
I also spoke with an English friend who has been in Spain for 5 years and she told me she padi it after the first year but after she got her residency her solicitor (Spanish) told her "not to bother paying it"!
Seems the investigation will be ongoing[/QUOTE]


Hi,
You can elect to have a Fiscal representative in Spain, if you do not reside, who can deal with this for you - or at least advise you on this.

Al

Beachcomber

You will find threads on this subject here and here.

There is also some information from AEAT in English here.

Do not set too much store by what you read in books especially by David Searl who gave information on a local radio station a few days ago that was totally inaccurate and misleading.

Although the bank will send you the details you need in order to make your tax declarations the onus is upon each individual to use this information to make his/her tax return. No demands are sent.

EsuriJohn

Hi Beachcomber,

I don't set store by individual books since I don't think I Have found consensus on any single subject between all 6 of my books. However if there is a general trend they follow I look to the authors who are respected in the field I'm researching.

Blevins is a tax expert and Searl is a Law expert if the others lead in a certain direction and they confirm then it's a safe bet the truth lies somewhere in that direction.

I know the law in Spain changes quickly and Regions do differ in their tax regimes but you have to start somewhere and its a good bet that as a non-resident with no abatement if a wealth tax exists you will have to pay some tax.

All the magazines and newspapers report that the tax collector is getting more zealous about collecting what is due under the law and if you just ignore him he won't go away and the fines for tax evasion and avoidance are pretty steep.

My tactic is to plan ahead and not be liable for as much as possible if I'm successful only time will tell.

Regards.

John.

PS just read the links they are very good particularly your bits but I think some were written before Wealth Tax was established.

bumble17571

Thanks to all who have submitted info,much appreciated.
I'm off to see a Gestor on Monday!! :scared:

EsuriJohn

Hi bumble,

Yes I am sure thats the answer but equally I think its good to have a loose idea on what to expect since I don't speak Spanish and it would be rude to expect him to speak tax-mans English!

Regards,

John.

QUOTE=bumble17571]Thanks to all who have submitted info,much appreciated.
I'm off to see a Gestor on Monday!! :scared:[/QUOTE]

Beachcomber

David Searl is a journalist who works in conjunction with a firm of lawyers in Fuengirola from whom he obtains his information which is not always correct.

I have followed his ramblings for over twenty years since the early days of his column in the now defunct Lookout magazine and whilst there is some basis to much of what he says I have had occasion to challenge several of his assertions and have always been proven to be correct.

The form 214 was introduced nationwide in 1994 so this is one aspect of Spanish taxation that has not changed since then. Prior to that the declarations had to be made on form 210 for Renta (which was introduced in 1992) and 714 for Patrimonio which has been payable since being introduced by Franco.

These separate forms still have to be used by non-residents who own more than one property with different referencias catastrales.

Beachcomber

Just to answer bumbles original questions:

The tax return is a kind of self-assessment. You work out how much tax you have to pay, enter it on the form and take it to the bank for payment.

No tax returns are sent to you. The forms are available from some estancos or from your local tax office. You have to submit one form for each owner named in the escritura.

The patrimonio (wealth tax) is calculated by taking 0.2% of the highest of three values - the amount shown in the escritura, the valor catastral or any revised amount imposed by the tax authorities.

The tax base for the renta is 2% of the valor catastral (1,1% if the valor catastral has been revised since 1994) and 25% of the result is taken as the tax payable.

Beachcomber

I just thought it may be worth reviving this thread because if, as seems possible, the Spanish government is forced to reduce CGT for non-residents from 35% to 18% they will be looking to make up the shortfall in other directions and the most likely seems to be more rigorous enforcement of the payment of these annual non-resident taxes and the taxation of rental income.