WEALTH TAX, LATEST INFO ( article was written 16th June 2008),

Post reply   Start new thread
:: New - Old :: Old - New

Pages: 1 | 2 | 3 | Next |

Forum home :: Latest threads :: Search forums
The Comments
16 Jul 2008 00:00 by morerosado Star rating in Guardamar del Segura.... 6927 posts Send private message

morerosado´s avatar

This was sent by someone's lawyers to them..

Last April, the Spanish Minister of Economy announced the implementation of several measures to help the reactivation of the Spanish Economy.

One of the measures, which has sought the most, is the abolishment of Wealth Tax.

This tax was created back in 1977 and regulated, as it is now, in 1991. Those owners of a real estate property located in Spain on 31st December of each year, regardless the value of the property, were obliged to pay a 0,2% on the highest of the following figures:

1 – The cadastral value, which is shown in the local rate demand.
2 – Purchase price.
3 – Re-assessed value given by the tax department.

To diminish the amount of the wealth tax, the owner can take into account any charges set up against the property (mortgages being the most common charges).

Every year, all non-resident owners of Spanish real estate are obliged to file and pay their wealth and income tax return (income presumed from ownership of urban real estate assets - irrespective of whether the real estate assets are rented out or not).

A standard individual owner of just one property may file both the Non resident Income Tax (for the imputed income) and the Wealth Tax return (corresponding to its ownership) on the simplified Form 214.

The filing and payment of this tax should be made anytime during the calendar year, but in the following year to which the tax refers.



So after this announcement, what is going to happen?

First of all, it must be explained that although the Minister declared the abolishment of the Wealth Tax, with effect from 2008, the Government still has to publish the corresponding legal provision to implement this measure. On the date this article was written (16th June 2008), the said provision had not been produced yet, but it seems that the Government will set up a 100% allowance for both resident and non-resident tax payers.

This means that the tax will still be there but with a “zero” quota, so no money will have to be paid.

It is still to be ascertained, whether there will be a declaration duty or not. Do not forget that one of the reasons for this tax to be created in the first place, was to control the ownership of assets which sometimes remained “unknown” for the Tax Department and also to give the authorities an extra way to facilitate the crossing of different data.

Nowadays, our computerised world allows the Tax Department to have a very accurate knowledge of all assets owned by anybody.



Am I obliged to pay my Wealth Tax this current year?

The answer is YES. Please do not forget that the Spanish Tax Year runs from the 1st January until the 31st December and that the tax is paid in arrears. So up until the 31st December 2008, we should pay our wealth tax corresponding to 2007 (In the case of owning more than one property, the deadline is June 2007).



Will the abolishment of the Wealth Tax mean that non-resident owners will have no taxes to pay on their properties?

Not at all. Non-resident owners are still obliged to pay tax on the income presumed from ownership of urban real estate assets:

Non-resident tax payers titleholders of urban buildings, which are for private use by themselves, and not involved in economic activities or that are left empty, are subject to non-resident income tax. To this effect, the owner must calculate as income, an amount of 1.1% of the building’s assessed value or “valor catatral” (2% if the assessed value has not been revised or modified since the 1st January1994). The tax rate applicable to the calculated income is 24% (up until the 31st December 2006, the rate was 25%).

Owners of rented or sub-let buildings will continue to be obliged to pay tax on their earnings as usual.

Of course, the yearly payment of local rates (council tax) also continues for both resident and non-residents alike.



Is it still necessary to appoint a fiscal representative then?

Although is not compulsory for non-resident owners of just one property to appoint a fiscal representative, it is very sensible to do so, especially when you are immersed in a totally different legal system.

In fact, most non-resident taxpayers voluntarily appoint a representative - who must be a resident in Spain - who serves as a communications liaison with the Tax Administration. Please be aware that within the new objectives of the Spanish Tax Administration, one of them is to pursue the collection of taxes from different sectors, which had traditionally not been very well controlled. It is within this selection that we could find the non-resident owners group. Needless to say, the Tax Administration has considerably improved its network so they are able to reach everybody now. Long gone are the days when a non-resident could have a property for decades without having paid anything towards their taxes!

But this new objective must not be understood as something negative. It is fair though, that now the taxes are lower, all individuals pay their share - which after all, is being reinvested back in to the communities.

So to sum up, having a professional representative is not a waste of money, quite the opposite in fact. It proves to be the best guarantee of being accurately and promptly informed of any new developments in the ever changing world of taxation.




This message was last edited by morerosado on 7/16/2008.

_______________________

PLEASE SUPPORT  http://www.galgosdelsol.org/ 

 

 

 

 

 

 




Like 0      
18 Jul 2008 12:56 by plexx Star rating in Hertfordshire & Elvi.... 131 posts Send private message

plexx´s avatar

Interesting & encouraging. Thanks.





Like 0      
23 Jul 2008 13:35 by number16 Star rating in Shropshire / Costa B.... 37 posts Send private message

Renta Tax Non-Resident

Hi 
We completed in March 2006 on a new property.

Should I use 1.1% or 2% of the Valor Catatral to calculate the tax to be payed

Jen & barrie

_______________________
jen & baz



Like 0      
23 Jul 2008 18:04 by morerosado Star rating in Guardamar del Segura.... 6927 posts Send private message

morerosado´s avatar
I posted all this in Looking for a fiscal representitive...  Jen & Barrie.  (24 May 2008 1:57 PM)

We use 1.1% as did our fiscal rep before we decided to do it ourselves. (We completed on a new property in April 2005).

As I understand it you use 2% if the VC had been changed since a certain date but a property as new as yours & ours wouldn't have had its VC changed since new.









_______________________

PLEASE SUPPORT  http://www.galgosdelsol.org/ 

 

 

 

 

 

 




Like 0      
23 Jul 2008 19:00 by number16 Star rating in Shropshire / Costa B.... 37 posts Send private message

Hi morerosado

Thanks for that we will use 1.1% when we do our own next year.

Couldn't get my head round the 2 figures, suffering from lack of sunshine.

Jen & Barrie

_______________________
jen & baz



Like 0      
23 Jul 2008 19:17 by morerosado Star rating in Guardamar del Segura.... 6927 posts Send private message

morerosado´s avatar
Jen & Barrie, I found what I'd been hunting for HERE

Income tax for non-residents who do not rent out their property (standard declaration)

Tax base: 2% of the cadastral value of the property (found on the IBI receipt), or 1.1% if the cadastral value has been revised since 1st January 1994. Tax rate: 24% (25% for 2006 and before)

_______________________

PLEASE SUPPORT  http://www.galgosdelsol.org/ 

 

 

 

 

 

 




Like 0      
23 Jul 2008 20:19 by number16 Star rating in Shropshire / Costa B.... 37 posts Send private message

Hi again Morerosado

Looks like its?% then.




This message was last edited by number16 on 7/23/2008.

_______________________
jen & baz



Like 0      
23 Jul 2008 21:48 by morerosado Star rating in Guardamar del Segura.... 6927 posts Send private message

morerosado´s avatar
?%  ??????????



_______________________

PLEASE SUPPORT  http://www.galgosdelsol.org/ 

 

 

 

 

 

 




Like 0      
23 Jul 2008 22:09 by number16 Star rating in Shropshire / Costa B.... 37 posts Send private message

Sorry 1.1%

_______________________
jen & baz



Like 0      
23 Jul 2008 22:12 by morerosado Star rating in Guardamar del Segura.... 6927 posts Send private message

morerosado´s avatar
All this taxing stuff makes you turn to  doesn't it, Jen & Barrie ?

_______________________

PLEASE SUPPORT  http://www.galgosdelsol.org/ 

 

 

 

 

 

 




Like 0      
23 Jul 2008 22:18 by number16 Star rating in Shropshire / Costa B.... 37 posts Send private message

It sure does, make mine a large one, its the way they word it first its one way  then its the other.

_______________________
jen & baz



Like 0      
23 Jul 2008 23:28 by Patty_1 Star rating in Hertfordshire. UK. .... 1062 posts Send private message

 Number 16, if you cannot get your head around it get a solicitor to do it for you, then try again next year things might seem simpler then.     I will try next year but done and dusted this year no hassle. Pat

_______________________

  




Like 0      
24 Jul 2008 09:12 by semijubilada Star rating in London/Torrevieja. 1052 posts Send private message

I pay my solicitor to do mine so in preparation for next year (fingers crossed) I'm going to recalculate the last couple of years figures using the instructions previously provided to see if it agrees with their calculations.

I'll then feel happier completing my own return next year and also be able to see how much I'm going to save each year (hopefully).



Like 0      
24 Jul 2008 09:12 by number16 Star rating in Shropshire / Costa B.... 37 posts Send private message

Hi Pat & Roy

Solicitor already taken payment for is work this year.

Just collecting info so that we can do it ourselves next year

_______________________
jen & baz



Like 0      
24 Jul 2008 13:53 by morerosado Star rating in Guardamar del Segura.... 6927 posts Send private message

morerosado´s avatar
Well, all you need to know (with details of going to Orihuela tax office) is in my post in Looking for a fiscal representitive... 24 May 2008 1:57 PM



_______________________

PLEASE SUPPORT  http://www.galgosdelsol.org/ 

 

 

 

 

 

 




Like 0      
24 Jul 2008 15:59 by Gypsy Star rating in south shields/formen.... 206 posts Send private message

Gypsy´s avatar

Hi More,
Just read your post on non residents tax. (23 july 7.17pm) 
It is a brilliant website. MANY THANKS
Also have sent you a P.M. regarding your P.M. (if you
comprehend)?????


_______________________

GYPSY




Like 0      
09 Aug 2008 00:18 by crackers Star rating in Devon / Costa del So.... 76 posts Send private message

Just noticed in a prevous post that the tax rate is down to 24%.  Does anyone know if this applies to the tax year to 31st December 2007 due by the end of this year?  How do you find out when tax rates change (apart from very informative sites like this)

We have used a solicitor for the last two years tax calculations and from information I have read on this site I noticed there were errors in both years which have had to be corrected.  I have now discovered that the wrong purchase price has been used so we are thinking of doing the next one ourselves. Would we have to instruct our solicitor not to proceed with the calculation and if so how far in advance?



Like 0      
09 Aug 2008 00:38 by morerosado Star rating in Guardamar del Segura.... 6927 posts Send private message

morerosado´s avatar
Hi Crackers

You obviously didn't read my post that started all this as I posted "The tax rate applicable to the calculated income is 24% (up until the 31st December 2006, the rate was 25%)". 

So, in answer to your question
"Does anyone know if this applies to the tax year to 31st December 2007 due by the end of this year?" it's yes, apply 24% for this years filing as that is for Jan 1st 2007 to 31st Dec 2007.

How do you find out when tax rates change (apart from very informative sites like this)

I only hear about changes from reading forums.
 

Would we have to instruct our solicitor not to proceed with the calculation and if so how far in advance?

I think you'll find you'll be charged by your lawyer for 2008 as we are so far into the year. Only they can tell you that. Obviously you should tell him you're going to do it or he'll charge you for doing it for you.

_______________________

PLEASE SUPPORT  http://www.galgosdelsol.org/ 

 

 

 

 

 

 




Like 0      
10 Aug 2008 10:56 by crackers Star rating in Devon / Costa del So.... 76 posts Send private message

Hi More, thanks very much for your reply to my questions.
I did read your earlier post but I guess I'm just being cautious.  As I said, our solicitor has made errors in previous years' calculation so it makes you this way.



Like 0      
15 Aug 2008 13:14 by morerosado Star rating in Guardamar del Segura.... 6927 posts Send private message

morerosado´s avatar
Just seen in another forum...

Good news for all - the Ministry of Economy and Finance have finally officially announced on their website that the government have approved the abolition of wealth tax. This applies to both non residents and residents. However, there is still no news on the 'renta' tax paid by non residents and what declarations will be required by non residents next year.

Next post said "thats good news ,they must have got the back taxes from telemicro :P"



This message was last edited by morerosado on 8/15/2008.

_______________________

PLEASE SUPPORT  http://www.galgosdelsol.org/ 

 

 

 

 

 

 




Like 0      

Pages: 1 | 2 | 3 | Next |

Post reply    Start new thread


Previous Threads

Corgi gas engineer wanted - 0 posts
Corgi gas engineer wanted - 0 posts
WINTER RENTAL OFFERED 500€/MONTH - 0 posts
Back on safe ground - 20 posts
Hi, says OMAR! - 3 posts
Polaris World Hacienda Riquelme Cleaning Service - 3 posts
Makro in Mrica - 5 posts
Electrical goods - 19 posts
Palma flight 99p Jet2 - 9 posts
MARKSFISH 1000 POSTS - 13 posts
Question for More! - 3 posts
certificate of habitation - 2 posts
Wanted - Aldea Golf property in August - 1 posts
Mattress needed - 5 posts
Villa or town house wanted for the 7th Septmeber - 4 posts
Independent or not? - 2 posts
Fadesa. Press announce on creditor´s meeting ( administration). - 0 posts
Electric connection - 1 posts
electrical items - 30 posts
Danish TV in Sapin - 2 posts
Moors and Christians festival in Orihuela city, Costa Blanca. FREE TRANSPORT FROM PLAYA FLAMENCA. - 0 posts
Campomar : First of the Summer Sewage Barranco Rubio beach - 0 posts
Meeting - 2 posts
When 'Veterans' Retire - 4 posts
Problem with water anyone claimed - 0 posts

Number of posts in this thread: 42

DISCLAIMER:  All opinions posted on these message boards are the opinion solely of the poster and do not necessarily reflect the opinion of Eye on Spain, its servants or agents.


1 | 2 | 3 |
Our Weekly Email Digest
Name:  
Email:
   


This site uses cookies. By continuing to browse you are agreeing to our use of cookies. More information here. x