Non Resident Tax Returns

Hi Lifeline

You will pay 1.5 or 2% if your valor catastral has not been revised since January 1994

You then pay 24% of that...........

Seems a tad high to me, but what is the Catastral Value?

Regards,

 Thanks FibbyUK  for your quick reply. We bought the house new in October 2007 for 216000 euros. 

By your formula it seems that our charge is high. 103.68 euros if my calculation is correct based on 2% of the purchase price.

I haven't used a calculator, but your figure seems about right.........

Have you had an IBI bill yet, cos if not, you can use roughly 50% of the Escritura price as an estimated catstral value.

As for the fees, rip off!

Pay your own taxes............

 Thanks for your help FibbyUK. We are now asking the solicitor to let us know the valor catastral. We don't have IBI as yet.

All complex when your new to it!

Ask to see their calculations Lifeline...........

I would be interested to see them too!

Good luck............

Sorry guys - nothing to say here. Just wanted to unsubscribe from this thread and couldn't see an 'unsubscribe' option. So have done this and unticked the 'notify' box.

 Our lawyers have replied saying that, as yet, they don't have a valor catastral for our property so they calculate it as follows - "If we do not have the valor catastral then we use the deed price on the escritura."

Is this standard legal practice in Spain or are they just 'at it'?

Hi Lifeline

IBI bills (which contain the Valor Catastral) can take up to a couple of years to be issued!

In the meantime, you can use th Escritura price, but only 50% of it for an average.

Never ever would the Volr Catastral be the same as the purchase price!

It's the same as in the Uk, your Rateable Value or Council Tax band, is based on the value of your home.

It is never the actual value...........

So ask them what their calculations actually are and if they have used 100% of the Escritura value, ask them why!

Hello Lifeline, your solicitor's 'admin' fee certainly seems excessive.  Have a look at my website for a simple, cheaper option to pay your non resident taxes in Spain

I'm beginning to think we have paid too much tax!  On our recent visit we went into our solicitors and paid €361.82 in taxes which on their calculation was based on our purchase price of €158,100. We have not had our first IBI bill as yet and so dont know what our Valor Catastral is, but from the previous two postings it sounds like we should have only paid tax on about 50% of €158100 - is that correct???? I have just emailed them querying this, but does this sound excessive to you??

 Thanks for all the help we have been given. When we worked out how the solicitor had reached the tax charge we discovered that they had used 50% of the escritura. Yes the fee seems high though.

hi Lifeline

Glad you got it confirmed, but the fees are still a sting in the tail eh?!

saffronbilli

Yes, that sounds far too high.

Calculate it yourself and challenge them!

Well assuming I am using the correct calculation and pressing the right keys on my calculator I actually make the solicitors calculation correct - 50%of purchase price = €79050. 2% of that is €1581 and then 24% of that is €379.44. Solicitors worked out that we owned the property for 349 days so that makes it €361.82 which is what we paid.

Is that how you work it out? Is still seems a lot. If when we get our first SUMA/IBI bill the Valor Catastral is much less, would we get a refund for overpayment of tax for this year?

How long have you had your property?

I ask this as you only use 2% if you Valor Catastral has NOT been revised since 1st January 1994

If it is a new property, then the Valor Catastral would have been set recetnly and then it would only be 1.1%

That would make the TOTAL tax payable 208.69€

This of course is divided between each owner.

As for refunds, I have no knowledge of how the system works, sorry.

Hope this helps

Thanks for your swift reply and advice. We completed on our property in January 2008 and it is a new property so does that mean that the calculation was correct but it should have only been 1.1% and not 2%?

Decided to use our solicitors for this first year and then try to do it ourselves in the future using somebody like yourself for guidance. Maybe we should have been braver this time! Especially since somebody has started a thread on this forum saying that our solicitors have gone 'bust' and anybody with money with them will lose it! Cant find any substance to it though so fingers crossed - they certainly didnt look like somebody about to go 'under' when we visited them last week.

Definitely 1.1%....................

Do it yourself next year, it really is very simple and I will give free aftersales support.

Spain is a learning curve in all respects eh?

Ask your Solicitor/Lawyer for a copy of the paid 210 Form, you could apply  to the Tax Office for a refund as the calculation was wrong.........worth a try..........

You will need a copy of the form anyway, for proof in the future of the tax paid, especially as they seem to have gone bust and won't be around when you do need a copy!

Regards

Thanks. They told us they would either post or e-mail us a copy when it had been done so if we've not received anything by the time we go back on the 8th July I think we will pay them a visit!

Ok, someone please help! I am so confused! My partner and I bought a flat in Malaga in Jan 08 and planned to live there but we moved back to the UK and have found ourselves still here. Will probably go back at some point to live but at the moment have it rented out to try to cover the mortgage. The rent doesn't cover the mortgage, or the community fees or anything else but I have just been told that I have to pay hacienda 24% of the rental income even though there is no profit. Now having read all the above about the IBI I am even more confused with this 2/1.1%. I have paid my IBI so does this mean I'm covered?

If I'm not covered then I am looking at finding around 1575euros per year!! Can this be right??

Do I have to do tax returns? What will happen if I don't?

I was also advised to register the depostit the tenants gave me but no one in Malaga seemed to have a clue what I was talking about so I didn't do it! Could this have repercussions.

Also I know in England there are usually different kinds of Mortgages if you are going to live in a property or rent it. Is this the same in Spain.

Sorry, so many questions - wish we'd never bought the place it's been more trouble than good!

hi Gusi,

I will try to answer your questions:

All Non Residents have to pay La Renta tax, whether they rent their place out or not.

All Spanish owners have to pay IBI tax.

So, there are 2 taxes here...........

La Renta - paid to the Local Tax Offfice

IBI - Paid to the Local Town Hall ( this is the equivalent of Council Tax in the UK)

La Renta is the one you should be concerned about, as it seems you have not paid this yet.

If you rent out your property, you have to pay taxes on the income earned, people that don't rent out their property still have to pay La Renta but at a different rate.

The 1.1% and 2% that you have read here, is part of the calculation for the amount of La Renta payable.

It is the percentage of the Valor Catastral, which is taken off your IBI bill.

The Valor Catastral is basically the same as the old "Rateable Value" that the UK council used to use to determine council taxes, it is of course by bands now.............

The 24% pertains to the La Renta calculation also.

i hope this makes sense?!!

Anyway, if you rent out your property via an agent, sometimes, and I say this again.sometimes.....the ageent pays the  La Renta tax on your behalf. So check with them, if they don't pay it, you will have to do it yourself or arrange for a Lawyer to do this for you.

I don't think it is as much as you have stated, so don't panic! I think you have calculated wrongly!

Good luck with it...........

Kind regards,

Ah thank you! So I basically have to pay the two taxes no matter what and if I don't rent out the flat I have to pay anyway, but a lesser rate. And I can't deduct anything (mortgage, community fees etc)?

My lawyer is an ex-pupil/friend and we always speak in Spanish - her English isn't great and I don't even understand anything about law in English so I think we tend to confuse each other when talking which is why I thought I would look for some extra advice. I will try to do the form myself next year as I guess it should always be pretty similar if nothing changes.

I hope the amount is wrong. I just understood that I had to pay 24% of what was paid to me for the rent. So as they pay 525euros per month, over a year that is 6300euros, and 24% of that is 1512euros.

Thank you so much!