Balcells Group provides legal advice to individuals, companies, investors, immigration authorities and other intermediaries. They have more than 40 years of professional experience and have built their firm on the basis of the integration of several generations of lawyers who offer a balanced vision based on experience and modernity. If you are a non-resident homeowner in Spain, you will need to file four different quarterly tax returns throughout the year. This property tax is based on the cadastral value and can vary greatly from city to city for the same type of property as it is a municipal tax. This property tax is called IBI “Impuesto sobre Bienes Inmuebles”. Taxes increase every year in line with inflation. The most fiscally advantageous means depends on the value of the property and the purpose of the purchase, depending on the case of some investments, it may be advisable to create a Spanish company SL. Good tax planning before buying a property is essential to save taxes in the future. Together, VAT and AJD increase the cost of buying a property in Andalusia by 11.5%. Despite the sun, the beach and the Andalusian way of life, there are other factors that must be taken into account when buying a property in Spain. It is surprising to see how, due to the lack of professional advice, many non-tax residents with real estate in Spain know almost nothing about their tax obligations and put themselves in a risky situation. Whether you are a resident of Spain or not, renting your property is legal. However, you should remember that you must report your rental income to the tax authorities.
You are actually required to report your income within 30 days of receiving it, but you can request it quarterly to simplify paperwork. It is true that almost all owners who rent their properties do not declare this income to the Spanish tax authorities and the chances of being caught are low. However, Spanish income tax takes into account the advantages arising in Spain. I am an Italian citizen and I live in Singapore. I am thinking of buying a property in the name of my son, who is studying in Madrid. Are there any tax implications if I buy the property on their behalf? For example, should I pay a tax on donations? Will he be able to save on ITP as this is the house he will live in? Thank you We have been based in Spain since October 2015 and rent our house in the UK. If we sell this property now, we are subject to capital gains tax because we are over 65 years of age. Other reports say yes because we haven`t lived in the property in the last 3 years. Expect to pay between 8% and 11.5% tax on a real estate purchase in Spain. The payment of taxes on rental properties in Spain is mandatory. If you miss a registration and payment deadline, you may incur fines or penalties as described below. Buying a property in Spain is associated with certain costs in addition to the purchase price.
In addition to taxes, you must pay a fee for professional services. As a result, the sum can be added to the purchase price between 10% and 15%. Don`t forget to include this number in your budget for the purchase. Understanding what taxes and costs are incurred when buying a property on the Costa del Sol is only part of the buying process. At Realista, we offer comprehensive advice and information throughout the process. Contact us to find out how we can help you buy the house of your dreams on the Costa del Sol. If you are a tax resident in Spain (spend more than 183 days a year in Spain) and you have not resided in Spain in the last 10 years, you can apply for taxation under this scheme within six months of your arrival in Spain. As a result, you can reduce your tax level by up to five years. Expenses are tax deductible for EU residents.
(bank charges, administration fees; Advertising expenses; Mortgage rates; Local taxes; Community levies; Insurance; Operating costs (electricity, gas, water, internet, etc.); Maintenance; Repairs and other property-related expenses) Note: For example, if the property is rented for 200 days, in addition to quarterly tax returns for rental properties, a tax return must be filed for the remaining 165 days. Therefore, you must take into account here that the property you are selling was your habitual residence and the one you acquire will be. Nevertheless, there are some requirements here. It is crucial that this property is located in the European Union and not outside the European Union for the exception to apply. Yes, local property tax rates vary from region to region due to local governments. Not only do you pay taxes, but you also have to pay a fee for services when you buy a home. These include the following: Due to health issues, bought a property to live in 2018 and put our 16-year-old house up for sale, we just sold it in 2019. My husband is 65 years old.
Are we eligible for capital gains tax exemptions? We changed our Padron in April of this year before the sale, does it make a difference? We have been based for over 16 years.