buying an apartment in spain

[swanseaboydan]

Saw a lovely place today - it’s 480k euro so not quite enough for the golden visa but I guess I could top up another 20/30 k in govt bonds ?
What would be the wealth tax implications on a property to the value of 480k ?

[eyebeebe]

swanseaboydan said:

Saw a lovely place today - it’s 480k euro so not quite enough for the golden visa but I guess I could top up another 20/30 k in govt bonds ?
What would be the wealth tax implications on a property to the value of 480k ?

It's 500k in property or 1m in Spanish bonds/equities. AFAIK you can't mix and match. You can buy multiple properties though (not sure if it has to be at the same time), so parking spaces/garages and rent them out could be an option.

Wealth tax is region dependent in both rates and exemption. Have a google of the region you are looking for + wealth tax. This is a general guide, which states 300k exemption per owner. https://www.pellicerheredia.com/en/wealth-tax-spai...

[HotJambalaya]

goingonholiday said:

Can only comment on what happened in Mallorca when the licence system was bought in. The local govt thought all their christmases had come at once. They enforced the licence and fined those that didn't. Not worth trying to avoid in my opinion. HMRC and Spanish authorities share data, if you are avoiding the licence and paying UK tax on that income the Spanish will eventually realise. Alternative is not to declare in either country, not something I'd be comfortable with.

You pay a wealth tax on your spanish assets, whether you are resident or not.

Assume you've visited out of season? I had a place on Mallorca for 12 years, I wouldn't do it again. The Islands are expensive to get anything done and the season is too short, weather in the shoulder season isn't good enough for me!

Thanks, it sounds pretty similar in Ibiza, havent visited out of season yet, currently planning a september visit and know a few people living there year round, but this whole wealth tax thing is massively putting me off.

eyebeebe said:

Wealth tax is region dependent in both rates and exemption. Have a google of the region you are looking for + wealth tax. This is a general guide, which states 300k exemption per owner. https://www.pellicerheredia.com/en/wealth-tax-spai...

Useful link that, watched the video in it, and a throw away comment the guy mentioned pointed out that the wealth tax was only payable on assets and things held in ones own name, not on company assets, so it seems that if I owned the house via a company I'd be able to avoid it? seems a bit easy... I think I'm very definitely going to have to speak to a proper expert on this.
Another interesting point was on renting out houses there it seemed that non eu residents arent allowed to deduct expenses from the rental income!
Its starting to look like a lot more hassle then its worth currently.

I also seem to be seeing conflicting information on the difference having a mortgage makes. For example if I buy a property for €2m with 50% deposit, is my tax on €1m or on the full €2m?

Edited by HotJambalaya on Monday 8th May 23:00

[eyebeebe]

HotJambalaya said:

Useful link that, watched the video in it, and a throw away comment the guy mentioned pointed out that the wealth tax was only payable on assets and things held in ones own name, not on company assets, so it seems that if I owned the house via a company I'd be able to avoid it? seems a bit easy... I think I'm very definitely going to have to speak to a proper expert on this.
Another interesting point was on renting out houses there it seemed that non eu residents arent allowed to deduct expenses from the rental income!
Its starting to look like a lot more hassle then its worth currently.

I also seem to be seeing conflicting information on the difference having a mortgage makes. For example if I buy a property for €2m with 50% deposit, is my tax on €1m or on the full €2m?

Edited by HotJambalaya on Monday 8th May 23:00

Yes, definitely worth getting some advice at that kind of level. You are right about not being able to make deductions as non-resident. As I understand it the wealth tax is on net wealth, so after the mortgage. I think you can also stack the housing exemption and the wealth tax exemption to reduce how much you would pay. Using a company structure probably would get around that, but may come with additional costs. I guess you are also aware that the stamp duty equivalent is 10%?

Edited by eyebeebe on Tuesday 9th May 06:35

[PF62]

eyebeebe said:

swanseaboydan said:

Saw a lovely place today - it’s 480k euro so not quite enough for the golden visa but I guess I could top up another 20/30 k in govt bonds ?
What would be the wealth tax implications on a property to the value of 480k ?

It's 500k in property or 1m in Spanish bonds/equities. AFAIK you can't mix and match. You can buy multiple properties though (not sure if it has to be at the same time), so parking spaces/garages and rent them out could be an option.

Looks like the Golden Visa might not be around for too much longer - www.reuters.com/world/europe/spain-considers-endin...

[rdjohn]

eyebeebe said:

It's 500k in property or 1m in Spanish bonds/equities. AFAIK you can't mix and match. You can buy multiple properties though (not sure if it has to be at the same time), so parking spaces/garages and rent them out could be an option.

Wealth tax is region dependent in both rates and exemption. Have a google of the region you are looking for + wealth tax. This is a general guide, which states 300k exemption per owner. https://www.pellicerheredia.com/en/wealth-tax-spai...

We recently obtained our Golden visas in Andalusia. The first cock-up our lawyer made was putting the property in joint names which you cannot do unless you hit the €1,000,000 mark, un-mortgaged.

As we do not wish to become tax resident, obtaining health insurance at our age was quite expensive at €3,500p.a. There were several hurdles like proving our 50-year old marriage certificate was valid. As we are British, the fact that our CRB checks were French, where we were resident, counted for nothing.

Yesterday, there was an article in El Pais suggesting that Spain may follow Portugal’s example and abolish Golden visas - the EU don't like them and they don't really fit in with a Socialist Government agenda. They seem to have missed the issue of EU citizens generally and Scandies particularly, buying properties and thus driving up prices.

https://elpais.com/economia/2023-05-08/el-gobierno...

[HotJambalaya]

eyebeebe said:

Yes, definitely worth getting some advice at that kind of level. You are right about not being able to make deductions as non-resident. As I understand it the wealth tax is on net wealth, so after the mortgage. I think you can also stack the housing exemption and the wealth tax exemption to reduce how much you would pay. Using a company structure probably would get around that, but may come with additional costs. I guess you are also aware that the stamp duty equivalent is 10%?

Edited by eyebeebe on Tuesday 9th May 06:35

Yes, was talking briefly to an agent there who said that some properties are held by companies and you just transfer company ownership with a note in the contract that any liabilities before X date are responsibility of the previous owner. Interestingly she's the one that said wealth tax is based on the full value and the mortgage isnt deducted, whereas everything else seems to show that it is. What was the housing exemption? the 700k deduction that a non resident can make?

Will 100% be getting pro advice before buying anything, in fact, I'll have to get it before selling anything to make space for this!

[swanseaboydan]

Really helpful feedback from everyone

[Phil.]

Squatters took over my villa — and police said I had to pay their bills

https://www.thetimes.co.uk/article/squatters-took-...

[PF62]

Phil. said:

Squatters took over my villa — and police said I had to pay their bills

https://www.thetimes.co.uk/article/squatters-took-...

"The firm claimed the squatters wanted €5,000 to leave but that they had negotiated down to €2,000. Reagan didn’t question this because “I just wanted them out”. Four days later they were gone."

Seems like a nice business for the 'removal' firms, and I rather doubt the squatters actually received the €2,000 the villa owner paid over.

[Phil.]

PF62 said:

"The firm claimed the squatters wanted €5,000 to leave but that they had negotiated down to €2,000. Reagan didn’t question this because “I just wanted them out”. Four days later they were gone."

Seems like a nice business for the 'removal' firms, and I rather doubt the squatters actually received the €2,000 the villa owner paid over.

I thought that was suspicious too but he paid what was asked and the problem was resolved.

I think one of the last sentences sums up the issue:

“It’s one of those problems where the risk is very very small but the cost is very very high,”

[eyebeebe]

It’s taken 6 months and about 6 hours in the last couple of days at the notary to get to this stage, but finally, it’s ours! Everyone who has come into contact with the seller along the way has said she is a complete nightmare. I’m talking about professional people like the notary who openly told our Gestor this! She even mugged us off for 10 Euros for a key today when we were doing a final check of the things we had agreed to buy off her. I said a few words and had to leave before I exploded. I was still seething at the notary hours later

I also learnt that despite having the winner of “best wine shop” in Spain in the town, getting a bottle of a decent vintage champagne isn’t possible (1%er problems I realise). Still not a bad drop

[Chris Stott]

Congrats eyebeebe!

Our seller (a Brit no less) was also a complete PITA… bu t you’ll forget about it in the years to come as you enjoy your time there.

[Outdoor]

We are thinking of moving back to Spain. Used to live inland from Murcia for 6 years. Returned to uk about 8 years ago. We love Sotogrande and are considering there. We have a £1m+ budget so golden visa territory. Can anyone recommend a good reliable estate agent who deals with property in Sotogrande. Muchos

[HotJambalaya]

question re Golden visa:

If you have one issued are you automatically deemed a resident of spain, or do you still have to hit the certain number of days a year before they call you a resident?

[Chris Stott]

Outdoor said:

We are thinking of moving back to Spain. Used to live inland from Murcia for 6 years. Returned to uk about 8 years ago. We love Sotogrande and are considering there. We have a £1m+ budget so golden visa territory. Can anyone recommend a good reliable estate agent who deals with property in Sotogrande. Muchos

Don’t know her personally, but a friend of a really good friend who has a property in Sotogrande…

Irene Rosenblatt
[phone]
[phone]

If you do use her give her my name and say I’m a friend of Yasmin.

Edited by Chris Stott on Thursday 17th August 17:37

[Outdoor]

HotJambalaya said:

question re Golden visa:

If you have one issued are you automatically deemed a resident of spain, or do you still have to hit the certain number of days a year before they call you a resident?

I believe you have to be a resident for 183 days a year before you are deemed a tax resident. To keep the visa you have to spend 1 day per year in Spain. I think that’s right!

[Outdoor]

Chris Stott said:

Don’t know her personally, but a friend of a really good friend who has a property in Sotogrande…

Irene Rosenblatt
[phone]
[phone]

If you do use her give her my name and say I’m a friend of Yasmin.

Edited by Chris Stott on Thursday 17th August 17:37

Many thanks for that. I’ll look her up

[Phil.]

Outdoor said:

I believe you have to be a resident for 183 days a year before you are deemed a tax resident. To keep the visa you have to spend 1 day per year in Spain. I think that’s right!

If you decide to become a tax resident in Spain make sure you take some advice on wealth tax from a Spanish tax expert long before you consider the move as you may need to get your UK finances in order.

[Chris Stott]

Andalucia have abolished the wealth tax… though the previous left wing federal government was trying to over rude that.