Wealth Tax

Old Jun 24th 2018, 7:27 am
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Default Wealth Tax

I am trying to find out if I am liable for wealth tax as the overseas owner of a property in Catalunya?

I live and work and pay tax in Australia, but have just become aware of the wealth tax and wanted to find out more about it esp if I am liable to pay it and if so how much.

Regards Kieran
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Old Jun 24th 2018, 7:41 am
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Default Re: Wealth Tax

Originally Posted by Psykalist View Post
I am trying to find out if I am liable for wealth tax as the overseas owner of a property in Catalunya?

I live and work and pay tax in Australia, but have just become aware of the wealth tax and wanted to find out more about it esp if I am liable to pay it and if so how much.

Regards Kieran
Wealth tax is payable on (worldwide) assets of over 700k€ with a generous allowance of 300k€ on your main property. This is per person.
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Old Jun 24th 2018, 8:53 am
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Default Re: Wealth Tax

Hmm
That raises a number of questions.
How do the Spanish tax authorities know what assets you have?
What is considered the main property.. is this the one you spend the most time in?
Are assets just property of does this include pensions and savings ?
how do they assess/ collect this? Is there a form?
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Old Jun 24th 2018, 9:43 am
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Default Re: Wealth Tax

As a non resident you only pay wealth tax on assets in Spain. As Snikpoh pointed out, there is an allowance of €700k. The extra €300k will not apply as it is not your home. If it was you would be tax resident which has many more implications. If the house is in joint names, then the allowance would be €1.4m.

Tax residents have to declare their world wide assets on Form 720 if their total assets exceed €50k but as a non resident you will not have to. The house will be registered in your name anyway so there is no need to declare it, it is up to you to pay any wealth tax on it. The value for wealth tax purposes is complicated as it does no necessarily relate to its market value.

You will definitely be liable to non resident income tax on the property as it is not your main home. The tax paid is relatively small and is based on only a small % the cadastral value of the property. It is often referred to as "imputed rental " income tax. If you do actually let the property then all rentals will be taxed as income but the "imputed rental" tax is reduced accordingly.
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Old Jun 25th 2018, 6:14 am
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Default Re: Wealth Tax

Originally Posted by Fred James View Post
As a non resident you only pay wealth tax on assets in Spain. As Snikpoh pointed out, there is an allowance of €700k. The extra €300k will not apply as it is not your home. If it was you would be tax resident which has many more implications. If the house is in joint names, then the allowance would be €1.4m.

Tax residents have to declare their world wide assets on Form 720 if their total assets exceed €50k but as a non resident you will not have to. The house will be registered in your name anyway so there is no need to declare it, it is up to you to pay any wealth tax on it. The value for wealth tax purposes is complicated as it does no necessarily relate to its market value.

You will definitely be liable to non resident income tax on the property as it is not your main home. The tax paid is relatively small and is based on only a small % the cadastral value of the property. It is often referred to as "imputed rental " income tax. If you do actually let the property then all rentals will be taxed as income but the "imputed rental" tax is reduced accordingly.
I thought as tax residents it was only if your overseas assets exceeded 50k you had to fill in form 720 you did not include your Spanish assets in the calculation for WT unless you were really rich and had assets over about 1m in Spain?
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Old Jun 25th 2018, 6:43 am
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Default Re: Wealth Tax

Originally Posted by EsuriJohn View Post

I thought as tax residents it was only if your overseas assets exceeded 50k you had to fill in form 720 you did not include your Spanish assets in the calculation for WT unless you were really rich and had assets over about 1m in Spain?
As I understand it, form 720 is ONLY for assets outside Spain.

For wealth tax, as I understand it, the following is the case;

"Residents pay wealth tax on their worldwide assets but have quite generous tax-free allowances, whereas non-residents are only liable on net assets within Spain but miss out on some of the allowances."
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Old Jun 25th 2018, 8:47 am
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Default Re: Wealth Tax

As the poster does not live in Spain isn't he only liable for the Modelo 210 tax? He is in the same position as me and that's all I pay Spanish tax wise that is a very small annual amount.
https://www.agenciatributaria.gob.es...ion/GF00.shtml
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Old Jun 25th 2018, 5:18 pm
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Default Re: Wealth Tax

Originally Posted by johnnyone View Post
As the poster does not live in Spain isn't he only liable for the Modelo 210 tax? He is in the same position as me and that's all I pay Spanish tax wise that is a very small annual amount.
https://www.agenciatributaria.gob.es...ion/GF00.shtml
He may own a mansion that is over the threshold for wealth tax not something I need to worry about. Also re the 720 if resident surely that should be over 50,000 euros value in the designated bands ?
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Old Jun 25th 2018, 5:56 pm
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Default Re: Wealth Tax

Originally Posted by johnnyone View Post
As the poster does not live in Spain isn't he only liable for the Modelo 210 tax? He is in the same position as me and that's all I pay Spanish tax wise that is a very small annual amount.
https://www.agenciatributaria.gob.es...ion/GF00.shtml
No, wealth tax if for residents and then for non-residents with a property here
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Old Jun 25th 2018, 6:19 pm
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Default Re: Wealth Tax

Originally Posted by bobd22 View Post
He may own a mansion that is over the threshold for wealth tax not something I need to worry about. Also re the 720 if resident surely that should be over 50,000 euros value in the designated bands ?
it it doesn’t matter if he owns half of Madrid. Non residents do not pay wealth tax or have to declare their world wide assets. Yes it is 50k in any one category not 50k overall.

Last edited by Fred James; Jun 25th 2018 at 6:23 pm.
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Old Jun 25th 2018, 7:25 pm
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Default Re: Wealth Tax

I thought wealth tax for non residents was as you said in your first post on the thread Fred? Due on Spanish held assetts with a value over 700,000 euros?
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Old Jun 25th 2018, 9:17 pm
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Default Re: Wealth Tax

Yes, my mistake. Assets in Spain do have wealth tax applied but the Form 720 declaration is not required. I need to read my own posts.
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