After Completion

Hi Everyone

There is a bit of confusion on our development forum about what we need to do once the dust has settled on completion.

In particular, can someone tell me -

What taxes do we need to register/pay for?

When do we need to do this? (some say you don't have to do anything for a year) 

Do we have to register at the town hall as owners even if we are not resident?

If we do have to register at the town hall, what are the reasons for this?

Thank You

Noreen

This message was last edited by nfm2862 on 1/24/2008.

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Hi Noreen
We only completed last June so we are very new to this .

The SUMA isn't paid until late the following year (I think)

Your administrator (I think I am right in that you have an apartment) will be in touch about a meeting and community fees. Well thats the theory anyway. They call meetings and don't tell you except for a notice on the door to the block! We haven't been asked to pay anything yet, probable because they can't get their act together but who knows. Oh the administrator is usually appointed by the developer, but can be changed later. At the first meeting, that you may not have known about, a president is'chosen' for the block/community.

Don't think that you HAVE  to register at the Town Hall (we haven't but  we are probable doing something illegal) but you can sign on the Padron  there. That will help them decide on what level of local services are needed. I think More has posted on this somewhere.

We are lazy or confused and have a fiscal rep. to keep us on the straight and narrow!
Hope this helps but not sure if it will- as long as you have set up dd for water and electricity you should be ok for the moment.

Gloria

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Hi there, you will get your ibi bills and basura direct to your door to pay and this is yearly. Your lawyer should have ensured you are registered for it and you can pay by direct debit in which case if you are ealry you get a discount (usually)

You may have community fees payable monthly, bimonthly or quarterley - again dd is the best way and you can find out via your administrator.

You will have a wealth tax but im not clear on this as I havent had to handle it at all.

You are meant to register at the town hall and it is so the town hall know who is here etc in order to ask for more money for infrastructure etc.

Elec and water and thats about it

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There is also the small matter of the wealth tax although there is a tendancy to ignore it here in Spain, especially as a non-resident. The following is a brief explanation on how it goes...."The Spanish resident and non resident property owner is liable for a tax on capital assets called "patrimonio". A Spanish resident has an exemption of 108.182 euros which is raised to 150.253 euros when the asset is the principal residence. This means that not husband and wife is exempt from 300.253 euros if both their names are on the title deed. A resident must declare all his worldwide assets including property, stocks, cars, yachts, jewels, works of art. etc. The basis of the valuation is real market value. A non residence need only declare his property and assets in Spain. The tax is declared and paid annually at the same time as the income tax but on a separate form 714." There are many websites where the full process is explained

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You can't ignore "Wealth Tax" since it is calclated on the value of your property and bank accounts. You may not pay when it is due but non the less the hacienda will know what you owe each year and add fines and interest to the ammount and place it as a charge on the property so that when you sell it will be the first charge on the sale income.

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Rixxy, where we have property it's up to us to go to the Suma office & get the paperwork for the IBI tax that says how much we need to pay then take that to certain big banks to pay. After that we can arrange for it to be paid by DD.

We had been asking friends who live on our urb (though not on our community) for two years almost whether we could go pay this (to keep saving us a trip to the Suma office & queuing). What we didn't realise at the time was they are on a different community who haven't as yet got habitation licences (as ours now have) & so they couldn't go pay their IBI tax (they had been going regularly to ask but had been repeatedly turned away & told it wasn't sorted out yet).

We were chatting with someone on our community, on our visit last September, about the IBI tax & they said they'd been to the Suma office & had been fined as they hadn't paid 2006's IBI. (10% fine increasing daily). When we went to check at the Suma office in September (just passport for my OH was asked for & he only had laminated cc sized copy but it was accepted as woman only wanted the NIE number she managed to get by typing in his passport number) we were given two sheets she'd printed off. One was for 2006 tax which had interest added on @10% up to the day we went into the Suma office & we were told we either had to go pay that day or go back on a day we could pay it as she had to recalculate fine !! The other sheet was for 2007 & we had up to 7th October to go pay that. We had an hour to dash back to the car, go to park by Halifax, who we bank with, & withdraw funds & pay at nearby CajaMurcia bank. (Halifax haven't the facility to accept IBI payment). Thankfully we had the 312€ we needed to pay our 2006 bill in Halifax. We had funds in Nationwide Flexi a/c but had just taken out maximum for that day to pay locksmith for changing locks to the 1 key type. A few days later we paid the 2007 IBI.

Expensive mistake leaving paying but we tried to prevent it. It's what you don't know isn't it & ignorance of the laws are no defence

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JohnKath - "it as a charge on the property so that when you sell it will be the first charge on the sale income." ---------------------------------------- I would be interested to know JohnKath how that charge is administered at the Notary and how it is collected from the UK after the sellers have returned there.

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The Notary (who is a government tax collector) has to ensure that a % of the sales price is retained to account for Capital Gains Tax  and it will be taken from that before it is released.

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I think what was meant was that if the charge has been registered against the property at the Land Registry, this will come to light at the notary before the sale actually goes through. In order to complete the sale, the buyer will obviously insist that this charge is cleared first.

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On completion you need to pay just the VAT ( if you are first buyers of the house) or Transfer Tax ( at 7%) if you are not.
Wealth tax is payable annually. I encourage you to find a good fiscal representative in Spain to do those taxes for you every year.

Best regards,

Maria L. de Castro

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JohnKath, you are confusing your wealth tax with the capital gains tax.

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Gillespie.  So you don't think the Hacienda will retain what it is owed out of the retention they make for CGT even if they should be paying it back to you because you made no (or very little) capital gain. I am sure the UK taxman would take the view that you really wanted to pay and but for some oversight you would have paid and they have this money so we will deduct it from that OK. I can't see the Hacienda being very different can you.

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At notary the notario has to ensure all the bills are paid to date and this should then be shown for payment in the distribution of the cheques.

If seller didnt have the money to pay taxes comm fees etc, these would be shown as outstanding at the time of signing from the official certificates obtained by the buyers lawyer and shown to notary, then it would be deducted out of the sales money and with held, obligation is on the buying lawyer to ensure it is paid, therefore the 3% retention is free for any possible outstanding capital gains.

After a while (8-9 months) this retention or part thereof is returned.

Thats the theory and so far I havent known any difference to that.

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Well JohnKath, In the 8 years I have been selling property in Spain, I have never had a case where the seller had their wealth tax deducted at point of sale. Wealth tax is submitted at the end of every year. Most non-residents here in Spain are unaware of wealth tax and hardly ever make a submission. I have never said it is right to avoid it, I´m just saying on the whole non-res brits are either unaware or don´t submit returns. CGT is automatically stopped at the point of sale on the sellers behalf if they are non-res. If they are resident, they must submit it by the year end, minus any deductions.

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Thanks to everyone for their replies.

I think I will take Maria'a advice & have a fiscal representative involved.

Noreen

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I have a fiscal rep and it costs me 75e +iva a year, if you are joint owners of a property then the wealth tax (patrimonia)/renta will be halved but you both need to submit a return so it would cost you 150e.  I use the solicitors who dealt with the purchase.

My Wealth tax is taken from my account in June and IBI in September.

I do realise I can deal with this myself but I plan to leave this until I'm over for longer periods of time.

In Torrevieja the Basura/sewage is included with the Aqua bill so we don't get an annual bill like you do on the Costa Del Sol.

My community bills are paid annually by D/D in January.

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