A mythical exodus?
 

The other side of the coin...

http://my.telegraph.co.uk/expat/anna...-put-in-spain/

Re: A mythical exodus?
 

Looks like a typical Telegraph infomercial. Links to companies who have a vested interested in such news.
I used to like read the Torygraph on-line but a lot of articles, which are non main stream news, are getting like this.

But I have to say there seems to be some more questions about moving on this forum.

Re: A mythical exodus?
 

Yes, the usual churnalism with links to estate agent written by a happy clapper. these type of articles are paid for by the agents mentioned. About as reliable as someone saying they saw a bar full of people in Spain;)

If there isn't an exodus why are there thousands of homes owned by expats in Andalucia on sale...are they down/up sizing:lol:

Re: A mythical exodus?
 

Where I have a house there are definitely less expats, but are they being replaced by 2nd homers from the UK who eye a "bargain"?

Re: A mythical exodus?
 

No doubt there are quite a few who have deregistered due to the punitive measures taken by the Spanish Govt, and are now living under the radar.

Spain's loss is the UKs gain in that respect, as far as taxes are concerned, so the Spanish authorities in their extremely limited wisdom have shot themselves in the foot........... yet again........big-time.

Regarding the overall exodus, I see that the Spanish TV News has just confirmed that the total population has reduced yet again, for the second year running.

So the exodus overall is no myth at all but FACT and hardly a sign of a miraculous recovery, methinks. :cool:

Re: A mythical exodus?
 

Predicting the weather isn't a perfect science, but we do know that certain conditions produce certain results.

Considering that most expats only live comfortably in Spain if they have income from elsewhere, I'd have to believe those who don't have income from elsewhere have either left or are in process. Expat exodus? Only if they came here in search of work in the first place.

Plus, obviously young Spaniards are highly likely to leave in search of a life. There isn't much hope for a job for them here.

So, I'd have to believe that the conditions certainly exist for an exodus of certain profiles... But the latter is a far larger group than the former...

Re: A mythical exodus?
 

I believe it's all about tax. Expats, especially British ones, took fright when they saw their fellow expats lose money in Cyprus a couple of years ago; money they didn't owe which was just taken from their bank accounts. The Cypriots were going after the Russian tax cheats but the British expats just got in the way.

In a similar way the Spanish authorities have gone after Luis Barcena and their other big tax cheats and again the British expats have got in the way and look like losing their hard-earned money again.

But the expats are more alert this time. They've stopped believing all the tax advisors who only get them into trouble - they're trying a new way to get justice in a crooked and unjust system.

They're simply disappearing from the system, deregistering as though going home but in reality merely reverting from residence to tourist status.

The authorities are scratching their heads but nobody is counting.

Re: A mythical exodus?
 

I think you are right. My neighbour was actually advised to become non resident, though living here full time.
If these fraudsters are state pensioners and therefore on the Spanish health system, surely declaring themselves non residents would mean they are no longer entitled to free care, or do they continue their cheating ways by abusing the Ehic?

Re: A mythical exodus?
 

I actually walked the walk as well as talked the talk :D

Yes, in my mind was the tax situation which many on here poo poo (mainly because they don't seem to have large assets). However the original plan was to become non resident to avoid the tax declaration and rent the villa to holidaymakers. However we also put it up for sale, and despite the doom merchants saying we wont sell in Spain for years, it sold almost immediately.

It has been purchased it seems by a Brit Expat living in another part of europe, and although purchased as a holiday home he is now renting it out to holidaymakers. I suspect the incidence of holiday lets will increase. Although the 720 tax issue is still a mute point, many of those with sizeable assets will take what action they need to protect themselves

Re: A mythical exodus?
 

Good points made and a:goodpost:.

as you say it is very easy to poo poo the 720 And all it implies, if the harsher tax regime in Spain would not affect ones finances in a negative way.

For the expats that it could be detrimental to, many have adjusted their living arrangements accordingly, like us

We would rather pay the lions share of tax to a country that is a lot fairer to its citizens, and sadly Spain is not a fair country.

Re: A mythical exodus?
 

Will the holiday lets increase, though? New rules will make it much harder to rent out, so most will become illegal

Re: A mythical exodus?
 

the new rules you speak of do not seem to have been as draconian as was first told. As long as you register your property it seems to be fine (in the CB North anyway), and I know people who have done it with ease. The intimation was that the authorities would refuse permission or make impossible demands, but in reality it seems its a case of going down and paying the money :)

Re: A mythical exodus?
 

These new rules you write about are not covering all of Spain, at present. Plus it should be said where they are laws they are differing from comunidad to another comunidad. Most of the new regulations do not make it hard to rent out. Just a few more bits of paperwork to deal with. :p

Re: A mythical exodus?
 

I have also just read this:
Glut of cheap Costa properties.
Again the cynic in me says this in another commercial for a property company.:frown:

Re: A mythical exodus?
 

At the end of the day the Exodus is no Myth, but cold hard facts and not only in one sense, but two,
........ unfortunately in both cases, Spain is the big time loser.

On the one hand there is the exodus of expats and others from the punitive Spanish taxation system, most preferring instead to opt for the much fairer UK system.

On the other hand we have the continued exodus of Spanish workers, many of them highly skilled, having earned their qualifications at the expense of Spain.

Even worse many of those who don't make the grade or can't cut the mustard abroad, return to add to Spanish unemployment figures, while many of the better or more successful ones look to stay in their newly adopted country permanently.

Re: A mythical exodus?
 

Glad we left when we could :(

Re: A mythical exodus?
 

We have a "large" amount of savings. Well into 6 figures, mainly in sterling, all declared on the modula 720

The tax situation you talk about is only in your head, it is imaginary. The Spanish government has not taxed anyone on their overseas assets and they have not proposed doing so

If and when that happens, then obviously we would reasses, but to make a decision based on something you think might possibly happen at some time in the future seems bizarre to me

Re: A mythical exodus?
 

I don't think people are necessarily worried about having some kind of surprise wealth tax that might be imposed on their assets, I think they are worried about having to pay income tax on the rent, dividends or interest that the assets earn them and, possibly worse, the tax they should have been paying since they became resident.

Incidentally, not many people know about the 720 asset declaration and a fair few don't even know they are supposed to pay income tax on foreign earnings.

When I mention such things they say that they are already paying tax on it in the UK/Ireland or whatever and it's got nothing to do with Spain - it's entirely separate.

It strikes me that if you read forums and the like you get worried and do something about it and if you don't you don't do anything and don't worry.

I know which group has got it right.

Re: A mythical exodus?
 

Maybe you are right. Ignorance is bliss I suppose.

I've met British people in the Costa Del Sol who say they don't need to pay autonomo because they pay national insurance in the UK. Seriously

I guess these people should be saying that they left Spain because they are worried that they have defrauded the Spanish tax office for many years and want to run away before they get caught!

Re: A mythical exodus?
 

How can anyone be ignorant about the 720? If they don't know it's because they don't WANT to know, and there is no excuse.
Local radio, free ex pat press, financial services have publicised this very widely-are you saying these ignorant people live in a bubble? They should be proactive about their affairs, as no one is going to knock on their door and say"Did you know you should be doing this, paying this?" or "did you know this and that law has changed?" Did they not look into this when they moved to Spain?
When I hear people saying things like "I didn't earn it in Spain, so I'm not paying income tax in Spain!) my blood boils.
Can you imagine their reaction if you told them that they should be paying Spain CGT on that house they sold in the UK, on those premium bond/lottery winnings, that lump sum when they retired, or imputed income tax on that bolt hole they have in the UK, or tax on that rental property?
Why can't all those who sign on the foreigners register (aka residencia) be given tax information on their liabilities in Spain at the same time, and the Hacienda be sent their details automatically? That wouldn't solve the problem of those not signing on, however.

Re: A mythical exodus?
 

I made the decision because my wife was diagnosed with cancer, as you already probably know by reading past posts.

The tax situation is not in my head, as you put it. For your information I ran a very successful business for many years by making decisions based on what might possibly happen sometime in the future and it has stood me well so far. If others choose not to then thats their choice

Re: A mythical exodus?
 

I tend to agree with Mitzy, better safe than sorry, especially with regard to this present Govt which has already taken harsh, unexpected and controversial decisions, some of which are now being brought to book by the EU Human rights Court.

To my mind Rajoy and co. are getting pretty desperate and all bets are off, especially with regard to Expats, who look to be much easier pickings than the Spanish with their long term and ever improving expertise or should that be culture, in avoiding the taxman, even more now than ever before.

Possibly slightly off topic, but I believe as has been said in other EU circles that this is one of the main reasons why a dramatic economic recovery is not being made or is likely to be made.

Re: A mythical exodus?
 

TBH most decisions people make are based on something that might possibly happen in the future.

examples: Most investments are made based on the 'future.

My daughter has just bought a house and while doing other improvements, has decided to have the open treads stairs changed, because she might possibly have children in the future.
Getting fully comp insurance incase you have an accident that is your own fault or critical illness insurance cover.

The world cannot function without decisions being made on only the possible outcome.

In that respect, I find your view bizarre.

So, I personally think that Mitzy is acting the way most people do in everyday life, making decisions based on assessing/guessing the possibilities that may or not happen in the future.

Re: A mythical exodus?
 

First of all, sorry Mitzy, I didn't know that was the reason at all

Everyone can make their choices how they want. Re taxes on assets, what is the worst they can happen? They could issue perhaps a 1 or 2% levy on foreign assets. They do that in year x, and I leave in year y. So not such a risk

Re: A mythical exodus?
 

Given all the negativity, you'd have thought the number of foreigners buying property in Spain had stagnated, or even fallen.
The figures show the exact opposite.
Purchase of properties by foreigners in Spain rose 36% in 2013 (still below the 2006 peak though).

http://www.lavanguardia.com/economia...ecio-2013.html

(article in Spanish)

Re: A mythical exodus?
 

So a 2% tax on. 800k of UK assets would be 16 k.

I or OH would not be willing to hand over that amount.

Also 800k tied up in a London property which still has a son or daughter living in, would not necessarily mean the owner can afford such a tax bill.

Re: A mythical exodus?
 

Yes you are right .... however a 1 - 2% levy on my foreign assets could have cost me dearly as I owned property in both countries, and it's therefore a financial risk that would be worth taking into consideration for anyone who has substantial assets.

It may happen .... It may not, but all in all the right decision was made for a variety of reasons :)

@ steviedeluxe ....... if you have no assets elsewhere, you have no worries. Maybe this will point to a less wealthy type of person moving to Spain, eh? :)

Re: A mythical exodus?
 

Crickey, I wouldn't move countries because of a 2% change of income

Seems completely irrelevent, you would be leading your lives based on completely the wrong objectives

But I get the point that if it was a property then you wouldn't have cash in hand

However, this is pure speculation. I am happy to bet a lot of money that this will not come to pass in the next few years, which essentially is what I am doing! :)

Re: A mythical exodus?
 

You have it all wrong.

You said that they could impose a tax on UK assets.

A person with an 800k ASSET who is taxed on 2% of its worth, does not have a change of 2% in their INCOME.

Some may only have a 20k pension or Income.

I thought you worked with stats, so you should know that a 2% tax on ASSETS does not mean a 2% change in INCOME.

I would have thought that you would not have to have that fact pointed out to you, but obviously I overestimated your understanding of figures.

Re: A mythical exodus?
 

.....and now this has been published in the same torygraph newspaper.

Falling property values and soaring costs are forcing expats home...

That article linked to in post one is looking even more like an infomercial. :blink:

Re: A mythical exodus?
 

I think the asset declaration has made some people (those that are aware of it) wary because it has made it much more risky to hide assets and therefore income.

An acquaintance went back because his father will kick it in the next year or so leaving him a normal sized town house somewhere in the south east probably worth about 1/2 million - a very common size of inheritance these days.

A small amount of inheritance tax will be payable in the UK but also a huge amount in Spain. In the past he would probably have 'ignored' it but it's too risky these days.

Some might be happy to give the Spanish government tens or even hundreds of thousands of pounds or more so that they can continue to live here, others will not.

Re: A mythical exodus?
 

Apologies, it was a slip of the tongue

I would not change countries because of a 2% change in my wealth. After all, this happens regularly depending on the exchange rates

If someone has £800k in property but absolutely no cash then they are financially very unhealthy. There is no point having all your wealth tied up in assets and no liquidity. You may as well be poor

Re: A mythical exodus?
 

From your point of view, I just used that as an example, there are plenty of people who have a small terraced house in London worth 800k that they may want to keep for future habitation, who knows.

There are some who want to keep an increasing asset, for whatever reason.

There are some who sell an increasing asset and stick the money in the bank, when they have no specific plans to do anything special with the money.:confused:

Re: A mythical exodus?
 

My rule of thumb is that an asset is only "worth" something once you cash it in.

We sold our flat in London because we made a lot of money in a short space of time and did very little to deserve it

The financial buffer that gives us in cash means my wife and I can be choosy about how much we work and can send our kids to private schools if we want. And can basically buy anything we want, whenever we want.

Selling the property has improved our lives no end. If we still had the flat then on paper we may think we were well off, but in reality having a property you don't live in, in another country is pointless. It is only a good investment as part of a much larger investment mix

Re: A mythical exodus?
 

Yes, but it doesnt take much to accrue a healthy asset value if you have owned property in the UK for many years, and have cash / investments as well.If you are happy enough to give away the (maybe) two percent as a one off (maybe) then power to you. Changing countries doesnt always mean the same to everyone. I can spend as much time as I like now in Spain "as a holidaymaker" without any risk at all :D

Re: A mythical exodus?
 

I used the property as an example, it may not be the best one.


You say you want to do the best for your children, sending them to private school, then surely you should be able to understand how expats also want to do the best for their own children , even when they are long past school days.

You seem to criticise others who decide to adjust their living/residency arrangements, to the advantage to their own wealth and children's future inheritance, and eem to imply that you are the only one that has their children's welfare at heart, where as others are just tax dodgers.

Re: A mythical exodus?
 

I am not happy to do it, but it is important to recognise that the lifestyle my family have here in Spain is phenomanal. We would need to earn 2-3 times as much in the UK to live to a similar level, probably more.

And then of course there are certain things that money cannot buy

So in that context, a slight risk that they maybe will come after 1-2% of my assets is insignificant

Re: A mythical exodus?
 

No. I am criticising the decision to move countries because someone thinks that possibly at some time in the future, then maybe the government will ask for 1-2% of your overseas assets

If lifestyle, health or even inheritance tax are actually the bigger reason for leaving Spain then fair enough, they are good reasons. But those who are running scared because of the asset declaration have their priorities wrong (imo)

Re: A mythical exodus?
 

It is easier for you to say, as you are married into a Spanish family.

The majority of expats will return home, most retired ones don't have their children living in Spain, and would not have the care that you would.

So if they had to pay a 2%asset tax on a 300k house in the UK that the intended to move back into sometime in the future, they would be in financial difficulties.

You have a rather superior smug attitude to other expats situation.

You see most expats as criminals or potential criminals and your disdain for others that have not jumped into Spanish lifestyle with your commitment sticks out a mile.

Me and my Oh, although we are both 100% Spanish blood, do not have such a lowly opinion of the British expats in Spain as you do.

Re: A mythical exodus?
 

I could equally say the same about your opinion of Spain and Spaniards

They are all poor and useless according to you, except for yourselves because you were lucky enough to be brought up in the UK

It is as if you have Stockholm syndrome