Non Resident Tax Return

I bought a Spanish property in May 2009 (not my main residence,more of a holiday home and not rented out)....Yesterday I received an email from the Spanish Solicitor I used  talking about Non Resident Tax Return,stating they have been acting as my tax advisor,news to me,stating that I need to send then 430 Euros as they have submitted this tax return on my behalf.

What is involved in completing this form,is the amount they are requesting legit for this work?

Regards

Dave

.
 

Hi Soto Dave,

I'm guessing, but unless you've got a large property you might find that the 430 Euros includes your solicitors fee.  Last year I paid a fee of 100 Euros - this year I've paid £19.95 (+ the tax of course), using "spanishforms" based in the uk. 

But yes in October 2010 you are liable to pay your tax for the previous calendar year - but if I were you I'd ask the solicitor how much of the figure quoted is tax and how much is their fee.

Regards

Richard

We bought our holiday home in April 2009 and have just paid NR Tax for the year. Points to note.

1) You should pay tax for the period you own the property pro-rata - i.e. 2/3rd of full year (May to December).

2) Solicitor usually charges an annual fee plus a one time set - up fee for registering with the Spanish tax authorities. In our case this was 50 Euros Each for set up.

3) The tax should be based on the Catastral value. This is the figure quoted on your annual council tax bill (IBI). It is usually much lower than the price you paid for the property.

4) In our case the actual tax paid was 76 Euros,  with 150 in associated fees (annual and first year)

5) Once set up you should be able to take over the job yourselves with help of info pack.

Guy

The property was bought for 400K euros,the 430 euros quoted is solicitors fees only.....

To me that sounds like your solicitor is being a greedy chappie.   The fees I've encountered for assistance with the Non Res Tax Return vary from €25 or so to a max of €125, but nothing like your figure.

As you bought your property last year, this is your first year to pay tax - ie they will have done nothing until now, so...

Good Luck

Richard

 Hi soto_dave

You can easily pay these taxes yourself.

If your Solicitor has taken it upon themselves to pay them for you without consulting you, that is not on!

The charges they make are extortionate, in comparison to the actual tax paid.

Check out my website, and if I can help you further, pm me.

Kind regards,

A gestor will only charge around 70 euros to complete a tax return.  I think your solicitor has been taking the p.

Your solicitor is trying it on!!

Tell him you never instructed him on tax and to ..............

I've seen some law firms charge EUR1,000 for legal and fiscal representation - and to make matters worse people pay!!!!

I would not pay a lawyer more than EUR150 on a combined (husband + wife) basis and after that there are cheaper options such a gestoria or online companies charging maybe EUR50 or DIY (it's simple really and there are some guides published somehwere).

Point to note but correct me if wrong

If purchased in joint names 2 tax bills are paid

The charge to send in up to 2  is the same as one.

A bit extra for 3+

Not quite sure but last year I paid fo my solictor about 120€ plus iva.

Non Resident Tax for us was around 375€

No matter what the Spanish taxman will tax you a %age on rental as a non resident.

Hope this is right

Ready to be shot down in Flames

JB

 Hi El Alamillo

1. Correct, each named person on the escritura pays their share of the tax due on that property.

So if there are 8 owners, there would be 8 tax returns, each paying 1/8th

2. If you pay the taxes yourself, there is no charge. If a Lawyer submits them on your behalf, there will be a charge. What the cost is, per tax return or per property would be individual to that lawyer I assume.

3. Your charge last year seems about the average

4. If your La Renta tax was 375€ I can only assume you own a mansion or your lawyer has grossly overpaid! The La Renta tax was always the cheaper of the 2 Non Resident's taxes payable. Now the Wealth Tax has been abolished, this has brought the overall tax bill for Non Residents down considerably

5. Correct, the spanish tax system taxes all Non Residents for La Renta, irrespective of whether you rent your property out or not.

No shooting down in flames!

You have got it right, apart from the amount you are paying in tax and to your lawyer!!!

Nice to get something right Thank you for your reply.

I have just checked back statements for last year

My wife and I paid €137.40 each

My solictors fees were €116.

My Property is a 3 double bedroom house with garage and pool close to the beach.

My IBI this year is €365

I paid €128.000 9 years ago. as I believe the town hall places a growth in value each year of around 2%.

Think this years Town hall value for assesment is around the €150.000 mark.

Same properties on sale €250.000

So that would make it about right.

I tend to rely on my solictor for most things leigal

The Above is a bit of a saveing on what we paid in Wealth Tax.

May look next year to sort out myself and save a bit.

JB

 That figure of 365€ is what you paid in IBI tax.

This is not the figure that the La Renta is based on.

On that IBI bill is a Catastral figure (way below the amount paid for your property and is shown on your Escritura)

The La Renta tax is calculated using the Catastral Value in the IBI bill

The amount you paid (365€) is irrelevant.

Ask your Solicitor (Or look on your IBI bill) what the catastral value is, you can then work out if your tax paid is correct.

I hope this makes sense!

Sorry        I might have been a bit miss leading too much information

Last years tax

Price paid back in 2001...... €128.000

What I was saying is that the calastral value based last year by the town hall is around 148.500€

Which represents a 2% growth on  the property in the 8 years.

We paid €137.40 each thats a total of €274

Plus the solicitors Bill.

Jb

 Now I am confused!

The catastral value on your IBI bill is NEVER higher than what you paid for the property

The Town Hall set the catastral value based on the price you paid for your property.

This value is then used to calculate two taxes, one being the IBI, the other ebing the La Renta Tax

So something doesn't seem right with your figures, check the catastral value with your lawyer

i would be interested to know the outcome as I feel the La Renta you have paid is very high

Regards,

Thank You. I am back over next week and this years IBI will be ready to pay so will check then and report back.

JB

According to another website this is what they say:

Personal Income Tax (Impuesto sobre la Renta de No Residentes – IRNR)

Non-residents who own property in Spain have to pay an annual income tax that varies according to whether the property is rented out or not.

Not rented out
Non-resident property owners who do not rent out their property and who do not have any other source of income in Spain pay income tax based on the value of their property. The tax rate is fixed as 25% of 2% of the valor catastral of the property.

The tax on a property with a valor catastral of 700,000 Euros would be as follows:
Property value for tax purposes = 700,000 Euros
Taxable base (2%) = 14,000 Euros
Tax (25%) = 3,500 Euros

My property is 120000 euros. According to above calculations my Tax would be 600euros which seems rather a lot to me. Any ideas?

Hi Pegeen

It's 24% of 1.1% if the Valor Catastral has been updated since the early 90's (1994 I believe).  So, your tax should be 317€

Peter

I haven't got my IBI bills here in UK so am unsure of my Valor Catastral figure. 

Firstly how much is your IBI, that is calculated using the above figure which is always less than what you actually paid for the house.

The figure you've quoted seems to be the sale price as VC is never normally a round figure.  I think mine would be of a similar value so I've give you my figures to work on.

I pay around 220E a year and my Non Resident Tax last year was 125.77.

Perhaps these figures will help you although we may live in a different area.  Some areas are paying increased IBI bills this year due to the debts accrued by their inept town halls. 

Unfortunately I have been a bit sloppy in getting round to registering and paying taxes here in Spain. To be honest, I was never told about anything like this when I bought the property and I guess I've been a bit naive. I'ts only in the past year that I got to hear about all this stuff.

Can someone advise me on how far back the tax people will go if I register now?

Are they likely to ask for previous years taxes, and will I be fined?

Worried.......