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Last year when we were looking to buy an apartment in the Canaries we were advised (by the British estate agent) to purchase through an option called BiCell. This is a couple of Welsh solicitors who have found a loophole in Spanish purchase for non-residents. Of course we asked around and although the solicitors weren't that keen they saw no reason to refuse. The agents put their hesitation down to the process reducing the solicitor's work. We discussed it with the Spanish mortgage lender (Halifax in Corralejo,Fuerteventura)and she'd heard of people buying through it with no complaints.It appears that the company BiCell will form a Spanish company for you and this way save us several thousand pounds in purchase tax, not to mention reduce any inheritance and capital gains tax. We didn't pursue the Canaries apartment but we are completing on an off-plan in a few months in Almeria and wondered if anyone had used this system on the mainland. The website is www.bi-cell.com
Jo and James
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Jo and Jim
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yes you can do it here as well to claim the i.v.a back but there are consequences further down the line that you should consider.........
As usual there is no such thing as a free carrier bag......
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www.taylorlandandpropertygroup.co.uk
still here after all these years!
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What are the consequences??
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i am not 100% sure now as i think the laws have changed from when i explored the option with a client...
Obviously though if you set up a Spanish SL(limited) company to purchase you will incur all relevant fiscal costs with the day to day running of a business.
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www.taylorlandandpropertygroup.co.uk
still here after all these years!
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We were told you'd have to send any income figures to the Bi-cell company which they would submit in the form of accounts and they would charge a minimal amount to do this. But if we are using the property mainly for ourselves then there won't be much of an income. We have buy-to-let property in the UK and a lot of tax can be offset against repairs etc. The agent said it could save us in the region of 8000 pounds at the purchase stage with the other capital and inheritance tax reductions later on and we agreed it was a small price to pay.
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Jo and Jim
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i hate to say this being one myself but "the agent said....." will go with many people to the grave!!
He may well have been correct and Honest but..
No offence meant mojito but i would advise anyone considering this option to take trusted legal advice from an expert in this field,corporate law changes monthly and for every loophole there is a civil servant looking for a blocking tactic.
Thats why anyone in businesss legally here pay lawyers to look after their financial concerns....
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www.taylorlandandpropertygroup.co.uk
still here after all these years!
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I shall approach our Spanish solicitor but so far the only action he has positively initiated has been the payment of his conveyance fee three years before the offplan is finished. And if it's not in his interest, I can see an Andalusian shrug from over here in the UK. I'm quite new to this forum and hope someone out there has experience of Bi-cell. Certainly the Fuerteventura Forum has been very helpful in the past.
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Jo and Jim
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Not heard of them myself but there are a few companies promoting this or similar. It used to be a good idea to buy in a spanish sl but the spanish have wised up to this fact. You will have to put a quarterly return and you can claim various expenses.
Tax wise the property itself I beleive will still be liable to wealth tax and whilst for inheritence purposes its a good idea - it will be in the selling of the property the problem comes in.
On selling you used to be able to sell the shares of the sl - and you still can. BUT if the buyer wants or needs a spanish mortgage, the banks will REFUSE to lend to the SL and the property will have to come out of it for the buyer. No problem providing all your accounts are to date and registered and stamped showing no outstanding debts but ther is a tax liability for capital gains which cannot be hidden from the price you declared on purchase and the price the new buyer pays.
I have had several sales and the seller has been well out of pocket after paying the admin costs and running of the business and no better off with the capital gains
Persoanlly I think its only a good idea if you are intending to keep the property forever and you will not have to sell, bearing in mind if your heirs do they will only be liable for capital gains and not inheritance tax which will be more.
Speak to a good lawyer about it as its your personal circumstances which should dictate if you set this up.
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Quite frankly m'dear, I don't give a damn!
www.herbalmarbella.com
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I agree and even more. It is true that this option could be a good idea in the past but, in general, i think it is not by now. New regulations in the latest two years i think have ruled very especifically about the way transnmissions of shares between shoreholders, evaluations of this shares will be estimated by the tax office.etc when the majority of the wealth of the company is property.
Jus to have an idea. Ïn the end the question is the value the now is adjusted to what we can consider a market value and, adtionally, is taxed not with 1% but with 7% as anu transmission of houses, apartments, etc.
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Thanks for all of that, I think we have to take out of that is we need to speak to an independant advisor.
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Jo and Jim
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We looked at two options when we bought our plot.
1. Buy through our UK registered limited company. Not a good idea at the time since we would have been taxed as a benefit in kind in the UK for all the time the villa was not actually rented out whether used by us or not as well as paying Spanish taxes. This kind of UK tax was stopped last April but I have no doubt it will be replaced by some other charge sooner or later.
2. Buy through a Spanish SL or a Spansh registered subsiduary of our existing UK LC this seemed like a good idea but would cost at least €3500 to set up with ongoing annual costs of perhaps €1000 pa and to reclaim vat the company would have to be vat registered in Spain and that has costs and is onerus, to cap it all the Spanish Hacienda have now introduced the benefit in kind tax the HMRC have just dropped.
Unless you intend to own more than one property in Spain I think the simple solutions are best and there are ways to be tax efficient in terms of family ownership of a single property.
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Thank you JohnKath for that detailed reply. We are also buying two investment apartments in Fuerteventura but even buying them the simple way is difficult enough when you have more than one mortgage in the UK. Spanish mortgage lenders don't seem to recognise mortgages for investment purposes. I dare say they see plenty of Brits coming out and renaging on their loans though with a 30-50% deposit they can't lose by it.
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Jo and Jim
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the cost of setting up an s.l. should not be more than 1.500,if done by a laywer.
the running cost 300 max per annum.
the prices you quote are typical foreign rip-off prices
call around for better prices or mail me and i will give you the name of our laywer.
the deal with buying in an s.l. is that cap. gains is 22%,16% when sellers as private individual.
,it negates the advantage on the back end.
take it from a real estate broker with 9 years experience in marbella.
do your home work before you buy
good luck
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