wealth tax

Can anyone tell us if we have to pay wealth tax,and if so how much?

Thanks

Noel & Debs

I'm afraid the answer is yes !   There are loads of articles on the web about this - try this one for starters :

http://www.spainlawyer.com/guialegal/guialegal.cfm?IDCAPITULO=11020000

 

Dave, 2A

When we took possesion of our apt. we gave our solicitor the authority to set up direct debits to pay for our utilities and also our taxes. We have now had €489-98 deducted from our account to pay our wealth tax.
Has anybody else paid their wealth tax and if so could they say how much.
Does anybody know how this tax is calculated as I am told it is very complicated. 
Any information would be greatly appreciated.
I believe wealth tax now only applies to non residents.


Regards,

Dave & Maura 17a

Dave and Maura, it sounds like you have a good deal there as we've been told our tax on a ground floor apartment will be 578.89 € plus another 127.60 € to the solicitor for "Calculation, Presentation and Payment Fee".  
I have no idea how it is calculated or whether we really do need a solicitor to present this for us.  Certainly the letter from our solicitor states "According to Spanish Law, every NON RESIDENT is obliged to assign a Fiscal Representative to act on their behalf in front of the General Tax Office".  
I had believed that all property owned by a non resident attracted a standard amount of Wealth Tax because it was assumed that you rented it out, regardless of whether you did so or not.  But, to again quote from our solicitors letter "If the property is for your own use, you pay a certain percentage of your property; if the property is rented, you declare the amount you have received in rent"
I must do a bit of research on this and would welcome any advice from others who already understand the ins and outs.

Terry 19b

We also signed everything over to our solicitor to do for us and I have not looked at the details of this at all.  I too will look into whether/what we have paid.  It did seem easier just to ask the solicitor to do it for us - but we quite like ours and would not have done so if we had not liked him!!  So my guess is that most people are doing their own.
Linda

We also signed everything over to our solicitor to do for us and I have not looked at the details of this at all.  I too will look into whether/what we have paid.  It did seem easier just to ask the solicitor to do it for us - but we quite like ours and would not have done so if we had not liked him!!  So my guess is that most people are doing their own.
Linda

Hi All,
I've been doing some digging around for information on paying taxes - I am waiting for some feedback from a few directions before having the full picture, however I can impart the following :

Firstly, you don't need a fiscal representative in Spain to declare your taxes if you are non-resident and have only one property. So, Terry - your solicitor was telling you fibs (unless you have more than one property in Spain).
Secondly, it is quite easy to work out how much to pay and to pay it yourself without having to pay a solicitor - more on that later.
Thirdly, the calculation for wealth tax is as follows (per joint-owner):

Sorry I have come in late to this discussion but I'll try to clarify a few points. Before I start I would be interested in how the amounts have been calculated for those who have already paid using a representative. The amount for 2007 will vary depending on when the purchase was completed and whether an estimate for valor catastral was used.
Now hopefully to clarify!!
First you used to have to appoint a fiscal representative but now if you only own one property in Spain you don't have to.
Property owners in Spain are liable for 3 separate taxes. 
1. Property Owners Imputed Tax. 
2 Wealth Tax and 
3. Annual Real Estate Tax (IBI).
The last, IBI, is paid to the local Council. It is based on the valor catastral and can vary from town to town.  As far as I am aware Los O properties have not yet been assessed by the local Council so we do not have a valor catastral. Hopefully, when we are assessed the annual IBI will be less than 100 euros.
The Property Owners Imputed Tax, is not charged on the owner's principal residence. So if you have residencia and own just one property in Spain you will not have to pay. Non-residents do have to pay.  The calculation for this is based on 2 per cent of the valor catastral. The valor catastral is usually less than the real value, or amount paid. However, as Los O properties have not been valued by the local Council the calculation, I think, will have to be on the amount paid (as the only amount available). If anyone uses a financial representative and finds that the valor catastral can be estimated as less than the amount paid please let readers know.
Anyway having taken 2 per cent of the valor catastral this is then taxed at 24 per cent for non-residents. So if we take 160,000 euros as the valor catastral, multiply by 2 per cent = 3,200. multiply by 24 per cent = 768 euros for a full year. You will pay a proportion of this depending on when you completed the purchase in 2007. This is a total for the property and each owner on the escritura has to pay their share.
The Wealth Tax is simple. Take the value declared in your escritura (probably the amount you paid) and multiply by 0.002. So 160,000 euros multiplied by 0.002 = 320 euros for a full year. 0.002 applies up to 167,129 then the marginal rate is 0.003.  Again each owner has to pay their share separately. Each of those with a Residencia do not pay the first 150,253 euros on their principal residence. So if the property is jointly owned by 2 people the exemption is over 300,000 euros. Apparently the EU has forced Spain to drop the Wealth Tax from this tax year (that is taxes due next year). So this will be the last year Wealth Tax has to be paid.
Hope this helps.
Eddie 20B


This message was last edited by Sueddy on 8/23/2008.

That is really helpful- thank you.  Can you give us an idea of a time line?  i.e. do the taxes have to be paid by end of the year 08 or before then?
Best wishes,
Linda

That is really helpful- thank you.  Can you give us an idea of a time line?  i.e. do the taxes have to be paid by end of the year 08 or before then?
Best wishes,
Linda

I do know that you declare both Imputed Tax and Wealth Tax on Form 214 if you are a non-resident owning one property and this can be at anytime in the year. As you won't have a tax office label in the first year you just fill in your name and address. I believe that this has to be done before the end of 2008 for 2007 tax year but not sure. I don't know where you get the Form 214 from. We have had residencias for four years so it is different for us. 
Eddie 20B

You can download Form 214 from here : http://www.propertiescostablanca.org/images/mod214e.pdf There are some useful instructions for filling it in here : http://www.alandalus111.com/9newstuff.html#Wealth%20Tax Just to repeat Sueddy's point below : "If anyone uses a financial representative and finds that the valor catastral can be estimated as less than the amount paid please let readers know." (either by posting it or sending a PM). According to the link above : "You must go to the Agencia Tributaria anyway, to obtain identity stickers (Tarjetas), so the Form 214 can be bought there at the same time. The forms cost 50 cents each and come in an envelope, that is used to post one copy to the Agencia Tributaria. The identity stickers contain your name, your NIF number and a bar code to identify you and your form When you have completed the Form 214, you stick an identity sticker on the top. You then take it to a bank and pay the money there. They give you one copy, keep one for themselves and send the third in the envelope, with another identity sticker on, to the Agencia Tributaria." However, Eddie says below that we won't have a tax office label in the first year - you just fill in your name and address - so I guess all we need to do is fill in the forms and take them along to a bank. We bank with Bankinter who are very helpful whenever we go into the branch so hopefully they will help us fill in the form correctly. Dave & Ailsa, 2A

Hopefully some good news! The book 'You and the law in Spain' after mentioning having 2% of the valor catastral attributed as a sort of imaginary income for the Property Owners Imputed Tax goes on to say 'This is 1.1% if your rated value (valor catastral) has been raised sharply since 1994'.  So perhaps newly rated properties, or properties like ours not yet rated, apply 1.1% not 2%. Certainly 1.1% of 160,000 = 1760 imaginary income  and then 24% of that = 422 euros for a full year. This is much more like the figure I would have expected.
It would help others if those that have paid already using a representative could provide the details of how their payment was calculated.
Eddie 20B

Hi, we have just got back from Spain (fantastic time - hot weather - lovely food etc etc) and our solicitor has responded to our e mails about the tax situation. He has done everything for us, and I will put up a list of charges when I have it - but it was not very much. Neither did he charge very much to do it. It is lovely to see the community being lived in and the gardens look great. Linda

Hi all

Finally received  details of the tax deducted from our account.

1. Wealth tax is paid at 0.2% which = €336.60 and must be paid for the full year regardless of when you signed.

2. Renta tax is 1.1% of the Valor Catastral and then 24% of that figure and is only paid on the period you own the property  
    and we paid €153.38.

If the valor catastral has not been set by the town hall you should pay on the amount shown on the escritura and based on that we should have paid €296 as we signed end of april so I dont know what figure they used.

Regards 

Dave & Maura 17A

Hi all, we have just had the following email from our solicitors:

 

We have already calculated your taxes and the amount to be paid for this year is 485.12 euros  since you completed your property in 2007.

 

Our fees for dealing with the tax calculation  will be 104,40 euros per person .

 

The total amount for you to pay including our fees plus bank charges is 696.92 euros.

There is no indication of how this has been calculated and we have asked for an explanation as it is different to Dave & Maura's but we have the same type of apartment.

Has anyone else had similar? 

Ali & Ken 11a

 

Hi All,
We arranged for our taxes to be paid by a firm in Vera (the one used by several people on Los Olivos) and the total bill came to 627.66 euros, of which 140 euros was the fee (70 euros per person).
This is more or less (actually slightly more) than the figure we calculated ourselves, but then that was based on guessing what the Valor Cadastral is (we still don't know what that is).

Dave & Ailsa
2A

p.s. looking forward very much to our next trip to L.O. in just a week's time !

Thanks Dave, I suppose we'd better stump up this year & at least get the admin a bit cheaper next year.

Enjoy your trip, hope the weather holds up. I drove over the Severn Bridge and along the S Wales coast today, but in the rain and mist it wasn't quite the same! 

Ali

So we can work out that for those without residencia the Wealth Tax payable this year for 2007 was .2% of the amount you paid for the property as stated in your escritura and the Renta Tax was based on one half of the escritura amount (as the valor catastral will not be known until we are assessed for IBI which could take a time) X 1.1% X 24% for the period of ownership. Next year calculating the Renta Tax for the complete 2008 year should be straightforward and declaring  by DIY possible saving the fees. Every little helps!!

Eddie 20B