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 PURCHASE. FREQUENTLY ASKED QUESTIONS
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Tax |
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| What are the yearly running costs for owning a property? |
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Approximate amounts are:
Council tax: 400€
Non resident tax: 400€
Community fee (only if there is a communal area to preserve) |
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| How do I pay these taxes? |
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You can appoint us as your fiscal representatives and we will take care of your tax returns.
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| Who should be the owner of the property for tax reasons? |
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There are a number of ways to purchase the property (listed below); each way has its advantages and disadvantages. What would be best for you would depend on your personal circumstances. We would be happy to discuss the various options and advise you as to the most beneficial for you.
In your own name
- In joint names: you and your spouse or co-purchaser
- In your children’s names or the name of the person who will inherit the property
- In the name of a limited company
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| Do I need a Spanish will? |
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If you don’t have a Spanish Will your inheritors will need to direct the case to the British authorities which will make the process long and expensive. If you have a Spanish Will the process will take place in Spain and will generally be simpler and cheaper. We will be pleased to help you make a Spanish Will.
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| What is the inheritance tax on a property? |
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Any individual legacy under €16,000 is exempt from tax; meaning that each inheritor of a property only pays tax on their share over €16,000.
Example:
A property jointly owned by you and your spouse is worth €120,000. Your half of the property is €60,000 and you leave it equally divided between your spouse and three children. Each will inherit €15,000 and therefore will be exempt from any tax.
An inheritor under 21 years of age is exempt of tax up to €48,000.
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| What are the capital gains taxes when selling the property? |
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Residents pay a maximum of 19%. Their capital gains tax is calculated as part of their Spanish income tax.
Non-residents used to pay a flat rate of 35%. Starting on January 1st 2007 non-residents will pay a flat fee of 19%.
If you are aged 65 or over, have lived in Spain and have had Spanish residency for three years you are exempt from capital gains tax when you sell your property.
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| What is the non resident tax? |
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For non-residents this is an annual tax based on Spanish assets only; there are no exemptions for non-residents. Therefore, non-resident property owners in Spain will be liable for wealth tax each year.
For residents the tax is based on worldwide assets.
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| Do I have to pay income tax? |
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Residents are taxed on a sliding scale from 24% - 43%.
Non-residents are taxed at a flat rate of 24%.
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| Who pays the Seller’s tax? |
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The buyer is required by Spanish law to pay 3% of the purchase price to the tax office to cover the seller’s potential tax liabilities. This, however, does not increase the purchase price for the buyer; they just pay 97% of the agreed price to the seller and 3% to the tax office. We will arrange for this to be done.
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