cidshock

I have been informed that once you buy a property, six months after you have purchased there is a property tax due,

How do they calculate how much you have to pay, is it more if you say pay the property price in full ie with no mortgage.
and is it less if you pay say, fifty percent and the rest with a mortgage.

I have been told a 30 percent of the propertys value is due after six months.

thankyou in advance.

Mercedes

Go and see an accountant, I brought my house last December, I was told this year by my lawyer that I needed to pay my iBI and weath tax this year for 2003. However my accountant says after looking at my paperwork that its due next year. Your taxes also depend on whether you are a resident or non resident. I fall into the latter.

Beachcomber

Apart from the IBI if you are non-resident you also have to pay wealth tax and notional income tax on your ownership of the property. If you are a resident you would probably fall within the allowances for wealth tax but you have to submit an income tax declaration each year.

Mercedes

Whats notional income tax, no ones mentioned that one yet?

Beachcomber

If you are a non-resident and only have one property which you do not rent out you declare for this every year on form 214 (Impuesto sobre el Patrimonio y sobre la Renta de no Residentes) upon which you also declare your for your wealth tax.

kathml

You have a property in Spain you pay tax Wealth tax on the value of property If non resident you also pay tax if you do not rent it out if you rent it out you pay tax on the rent They have you either way

Mercedes

Okay, thanks, will let the accountant deal with it, that's what he's paid for.

cidshock

So just say youre property purchased, cost 140,000 euros, 90,000 of which will be paid off and the rest on a mortgage, being a resident but not working my husband will not be a resident as he will be back and forth from the UK. Not renting out, what would the tax roughly cost, im just trying to get some idea.

thank you

sarah

kathml

Would suggest you get a fiscal agent to handle your tax You may need a lawyer to sort out residence position as it would appear husband is working in UK so will be taxed there you will also have to check out Social Security & health insurance position

elgestor

Sarah

First you need to define whether you are a fiscal resident or not. You also need to define whether your husband is a fiscal resident or not.

Non fiscal residents are required to pay Individual Income Tax and Property Tax as well as a local tax called Real Estate Tax. If however you are a fiscal resident then you are treated the same as any other Spanish person.

I sincerely suggest contacting a Gestor or Asesor Fiscal, not because I am one but because the penalties for incorrect payments and late payments can be severe. I can see from your post that you have been given all sorts of information, Beachcomber is absolutely correct in that you may need to use form 214: Simplified return for non-residents in case of a dwelling.

Let me outline for you the tax situation of non-resident taxation for private individuals who are owners of a dwelling used as their own housing on Spanish territory:

When a property is owned by a married couple or by various people, each one is defined as an independent tax payer, which means that an individual tax return must be separately filed by each of the co-owners.

Individual Income Tax
Regarding property used by the owner(s) as their own housing, the tax is based on an estimated income calculated as follows:

On a general basis it is 2% of the cadastral value of the property which appears on the Real Estate Tax receipt (Real Estate Tax = "IBI").
In the case of property whose cadastral value has been modified from January 1, 1994 onwards, the percentage has been set at 1,1%.
The liability takes effect once a year on December 31.

Tax rate: 25%.
The taxable amount is therefore 25% of the estimated income.

Property Tax
Non-residents nationals are required to file a return for this tax on estate owned in Spain on December 31 of each year, whatever the value of the estate.

I hope this helps you.

Mercedes

elgestor, what is the tax that is meant to be paid in June or was it May I've been given 2 different times of year and not quite sure which is for what. Can you pay all your taxes in one hit on a direct debit. (Anything for a simple life)

Beachcomber

I do not wish to hijack elgestor's information but a resident and a non-resident who owns more than one property has to submit his tax return between 1st May and 20th June for the previous financial year which logically corresponds with the calendar year.

A non-resident who owns one single property has to submit his return on form 214 at any time in the year following that in which it becomes due; ie for the financial year of 2003 it has to paid by the end of 2004. If a non-resident owns two properties with different referencias catastrales even if one of them is nothing more than a lock-up or a garage the form 214 cannot be used and the returns have to be done on different forms in the same way as if they were a resident. For a property that has been purchased part way through a financial year the tax is calculated on a pro-rata basis.

You cannot pay these taxes by direct debit as you (or your asesor fiscal) has to calculate them, fill in the forms and pay at the bank either in cash or by transfer.

Where elgestor refers to non-resident Property Tax in his final paragraph I assume that he means wealth tax (patrimonio) which is also declared on the same form 214 as long as you only own one property but in this case the tax on wealth up to €167.129,45 is 0,2% on the highest of the values of - valor catastral, - escritura value, - or any revaluation that has been made on the property by the tax authorities. The percentage payable rises in line with the property value.

If you need help with paying your taxes go to an asesor fiscal or a gestor. Do NOT go to a lawyer as he/she will charge you a fortune and probably give you duff information anyway.

Mercedes

Thanks Beachcomber, I was getting two different stories one from my lawyer and then from my asesor. I showed him my paperwork and he told me to go back to him next May as I had paid 2003. My lawyer told me I had to pay this year which was my IBI and weath tax. I'm non resident as I pay my income under UK at the moment.

Beachcomber

Mercedes, just to get it right, the wealth tax and non-resident income tax go together on the same form and is paid to the tax office during the year following that to which it applies. You have to pay this even if you pay tax in the UK although if your Spanish property figures in your UK tax return you could claim some of it back under the double taxation agreement.

The IBI is paid to the local authority during the current financial year and the time of the year for paying this varies from municipality to municipality. Some give you a discount if you pay early and all impose a surcharge if you pay late. This can be paid on direct debit but do make sure that it goes out of your bank account when it is due to.

Mercedes

Thanks appreciated.