scampicat

I keep seeing this mentioned; what is it (in words of one syllable please)?

I don't know ANY expat who pays it!

Most of the expats I know are retired and living on capital or a pension and pay no taxes in Spain at all.

Edited to add : Unless you mean the 'rates' bill? We all pay that.

mikelincs

Think they are talking about the 'wealth tax', which you ALL should pay, whether living in Spain or just owning property in Spain, different rates for residents, but it's based on the value of your house and how much you still owe on mortgage. WE DO PAY IT. If you aren't paying it, watch out, if you are caught they will claim all years back

Hillybilly

There is a level (for residents only) below which you don't have to pay patrimonio/wealth tax and it's per person, so many people are exempt. I don't know the up to date level for this year though. In 2002 it was €150253 per person on your principal residence. For non-residents you are supposed to pay from the first €!

jdr

Have a read HERE and HERE

scampicat

Right, looking at this post and the one below it, we have property worth about £145000, an eight -year-old car and the only bank account we have has money transferred into it from my husband's Teachers' Pension (which he pays tax on in England as it is a Government pension). This is the money we live on, around 700E per month. We have nothing else. We earn no money in Spain. We are Spanish resident.

Please don't tell me we are supposed to be paying a load of tax on it!

As I say, we know NO-ONE (expats) who pays it and I don't think people even know about it as no-one has mentioned it.

Maybe we are all too poor?

Mitzyboy

Theres just been a thread (which I can't find now) recently where I explained all this, and showed that a couple with an income of around 13000 euros and a capital (property and cash of around 500,000 euris iirc, pays no tax.

On wealth tax there are allowances for residents. Each of a married couple have 150253 euros allowance on their property, so you can have a property worth just over 300,000 euros to start with. Then a resident also pays nothing on the first 108 k of assets per person, so you have nothing to pay as a married couple on the first 516ish thousand euros. Then the first band thereafter is 0.2%

These figures may be slightly out as I am using the 2006 allowances.

So Scampicat, you should pay nothing in wealth tax on what you say, and no tax either .... but I think you should still make an annual tax return.

scampicat

Thanks Mitzyboy, that's a great weight off.

Obviously all the expats I know ARE too poor!

We've never filled in a Tax return here. I have no income and my husband pays his tax in the UK as I have mentioned. It is a Government Pension, so it has to be taxed in the UK.

We do have some money in English Bank Accounts, but nothing like the sum you mention. I am a non-taxpayer anyway, so get my interest gross.

Thanks aagain!

Mitzyboy

Its not just money ... its cars, investments, bonds, most everything excepting your household furniture unless its works of arts.

I've been advised that it is a good idea to fill in a tax return even if you are nil tax. Yes Government pensions are taxed in the UK, but someone told me that if done correctly it should be declared as an income and then claimed as your allowance.

scampicat

Thanks for your advice.

It's all a bit complicated and if it's nil tax I don't feel inclined to pay a Gestor to fill it in for me just to say 'nada'.

We don't have investments or bonds and our car is eight years old and all our furniture is IKEA. None of the other expats who don't work fill one in.

I will ask my Gestor next time I see her and see what she says.

Thanks for clarifying the matter.

Beachcomber

If or when you come to sell your property as residents you will need to obtain certificates of fiscal domicile from the tax office otherwise you will be treated as non-residents and required to pay the 3% retention and 18% Capital Gains Tax.

Although requirements vary from place to place it is likely that you will need to prove that either you have one of the UK pensions that is exempt from Spanish taxes or that your income is below the threshold at which tax should be paid. If you have submitted negative tax returns this will be sufficient proof.

However, you must bear in mind that your lifestyle should not belie your claim to a low income. In your case it probably doesn't but there are many people with a large house, a couple of nice cars, frequent dining out etc where it most certainly does.

Also bear in mind that the tax authorities can access your Spanish bank accounts online at any time without any formality whatsoever.

It is likely, in the future, that non-residents will need to obtain a certificate from AEAT to the effect that they have paid their non-resident taxes during their period of ownership of the property before they will be able to sell. Those who have not paid their taxes will have to pay them in arrears and will be subject to fines, surcharges and interest for late payment.

scampicat

We certainly have nothing to hide from the Spanish Tax authorities. If they wish to access our bank account they will find nothing untoward. We can also provide proof of my husband's pension.

However it does seem necessary to submit a tax return, even though we will have to pay someone a fortune to fill them in for us (British Tax Returns are complex enough, without trying to tackle one in a foreign language). As I say I know of no other non-working expats who submit one.

So our miniscule income will now have to stretch even further just for us to put 'nothing' on a tax return.

Thanks to everyone for your advice.

Beachcomber

As long as you go to a gestor rather than a lawyer the fee should not be extortionate. You may well be told that you do not need to submit a tax return. If so try to get it in writing.

Certain government pensions do not have to be declared. A retired police officer, for example, is exempt from declaring his pension even if it is over the threshold provided that it is his only source of income. The same may well apply to a teacher's pension but you will need to confirm this.

As for people who should be declaring and aren't, it may take a while but they will be caught up with sooner or later especially now that the Spanish treasury is looking for ways of making up the shortfall in taxes due to the reduction in CGT for non-residents from 35% to 18%!

In fact, many acquaintances who have not been declaring have recently received a letter from AEAT to the effect that they should be declaring for tax either as a resident or non-resident.

davyrowy

can anyone help please im confused with all the taxes ,just want to make sure we can afford to move to spain.
we are buying a property in spain , and are assets in spain and england combined would be worth annually about £470.000.
what would we be looking at in tax , i.e wealth tax , and local property tax on a property worth £150.000 in spain.
we are a married couple and would be residents in spain.
thanks for any help.

Mitzyboy

Cant help on local property tax as it differs area to area

That capital equates to 681,500 euros roughly
Your allowances would be roughly 516710 euros
Your tax would be about 330 euros for wealth tax

Then you would have income tax of course on the income you are generating, but if that was around 13000 euros you would be paying probably nothing. However, your income would probably be more, so you would attract income tax here.

http://www.spainaccountants.com/it.h...l%20allowances

davyrowy

thanks a lot for that , looks like are dream is still on, cheers mitzboy