karenaroma

hi my husband is taking early retirement and we are hoping to move to Spain later this year.
We have got our Uk house up for sale and the estate agent has advised us it would be a good idea to buy a flat to rent out.
This would keep us with an address in the Uk and also provide us with an income and somewere to return to.
We are going to rent in Spain for at least a year to see if we like it before buying a property.
My question is can we live in Spain and still own in the Uk?
We have an English financial advisor but he is unsure of the Spanish laws.
many thanks x

Rosemary

Yes you can own property in the UK and live in Spain but you will need to declare the rent that the property earns for you and also complete the forms declaring your world wide assets.

Rosemary

spainrico

Yes many Expats have property in the UK. Your tax status will change when you become resident in Spain and that can change things but you are entitled to own property.

scrubbedexpat095

As long as you declare it on modelo 720 next year (2014) there should be no problem

LOL Rosemary answered much more clearly that I did

karenaroma

many thanks for that its all really confusing with the tax situation.

Sorry if this is a stupid question but do you have to become a Spanish resident?

If we didn't would it mean spending 6mths in each country?

ive done so much research on the subject but keep coming across different answers

Rosemary

183 days is the magic number for becoming tax resident.

Rosemary

pete_l

Well, if you'll pardon my skepticism, they would say that, wouldn't they?

I've just sold up and moved to Spain from the UK. I did, briefly, consider keeping a pied-a-terre in the UK but I rapidly came to the conclusion it was a bad idea.

• First of all, you'll have to try to let it, while you're in Spain. That's not so easy these days as there seem to be millions of houses / flats for rent as their owners don't want to sell and take a loss on what they paid.
• Second, to get a sensible rent you could well have to commit to renting the place out for 12 months. That would make you financially resident in Spain, so having an "address" in the UK wouldn't really work.
• Next, if you did come to sell the flat/house in the UK, it wouldn't be your primary residence (since you weren't living in it) and therefore you'd have to pay Capital Gains Tax on any profit you made from the sale - if you're lucky enough to see a profit at all.
• You'd also have the expense of buying and furnishing the flat you buy as you may have too much furniture from your existing house - or you may not want strangers using your good furniture. Plus, putting stuff in storage is expensive (I was paying £100+VAT per month for 40sq feet of storage space in the South-East UK. A whole house-full would be many times more than that) and removing it to the place you rent in Spain is even more expensive.
• There's also a cost involved in kitting out a flat for rent. Making sure it complies with legal requirements for renting and has the necessary safety inspections.
• Also, a flat that you'd buy as suitable for renting out may not be the sort of place you'd want to live in permanently if you do decide to leave Spain - no garden, too many stairs & no lift, wrong location for retirees, etc. Depending where you live (check http://www.landregistry.gov.uk//publ...ices-and-sales ) prices could still be dropping, so you may take a loss on anywhere you buy.
• Finally, you'd have tenants which can be a bit of a millstone: not paying the rent, breaking things you'd have to get fixed, having to find new ones when the old ones leave and worrying about whether they're trashing the place in your absence.

So I decided it was better for my peace of mind and probably financially, too, to make a clean break and keep the cash from my house sale in high interest savings accounts. (Tho' the interest isn't that high)

karenaroma

thanks for that pete the information is very helpful.

I suppose we just need to be brave an actually make the move we can always buy a property in Uk if we do come back fingers crossed we love Spain that much that we never will lol

jackytoo

Best keep a bolthole in the UK everyone has said at sometime they are never going back Infact many are trying to sell and go back. Never say never, keep all your options open

No shortage of tenants in the UK and you can easily let unfurnished. Most parts of the UK had price increases last year too. Buy in Spain now and if the unthinkable happened and you wanted to return you would be priced out of the market.

scampicat

I would totally advise keeping a property in the UK. Out of all the expats I know from living in Spain for eight years 80% (including us) have returned, for various reasons. It is not always that easy to get back in the property market, especially if you buy a house in Spain and can't sell it (we were lucky....we sold ours - completion was almost exactly a year ago ).

We kept ours and our son lived in it with his girlfriend and a lodger and their rents paid the bills.

We then had it to return to when we came back - son bought a flat and lodger moved back with his parents.

karenaroma

we live in Birmingham very close to airport and NEC so I think there would be no shortage of people to rent especially business people as we are close to city centre also.

we have made our minds up not to rush and buy property in Spain as the rents seem so cheap and that gives us the option to travel about if we want to.

I would feel better to have something still in Uk .

Does anyone know how heavily you are taxed on the rental income?

I also think best not to cut all ties with Uk and stay on property ladder as property prices are rising in Brum at last.

scampicat

We're twelve miles from you up the M6 in sunny Wolverhampton.

spainrico

You seem to have made the decision to sell your present UK property before you have really done valid sufficient research to understand your options, the basics here in Spain and potential situation(s).

karenaroma

we have seen a financial advisor in the Uk and we have been researching moving for over a year.

we are certainly not moving on a whim

pete_l

The crucial thing to know about property in Spain is that it takes a horrendously long time to sell and agents' commissions are so high that they'll say practically anything to land a sale - so treat everything you hear with suspicion and remember that the agent (no matter how friendly they appear) are acting firstly for themselves and secondly for the seller.
Even in the "good times" it could take several YEARS to find a buyer for a property. So it's not practical to think that if you don't like the country, or a particular region, you can just sell any house you buy there (and I appreciate you're planning to rent, first) and move back to the UK.

However, on the flip side it means there is lots of bargain priced property available in Spain. On a strategic point of view, while house prices in Spain are still going down it doesn't make sense to jump in and buy - wait a little longer - maybe another year or two at a guess and the prices will have dropped further.

Don't assume that the asking price is realistic - maybe try an offer at about 50% of what the buyer has advertised it for and stand firm. Most will turn you down, but one or two may nibble. Just be *very* sure the house is right for you - and if you are in any doubt, about any aspect (neighbours, quality of the building, legality / paperwork, just walk away. There are many, many others to choose from and you will have the place for a long time