Non-resident taxes - confusion

Hello,

In November 2012 we (me and my parents) purchased a propertly in Murcia, Spain. The following October (2013) we received an invoice from our solicitors for the non-resident taxes for 25.48 EUR each relating to the 2012 period (unsure of the exact dates they cover).

This October we received the same non-redident taxes for 2013, however this time they are for 163.48 EUR each. I queried this with our solicitor and they informed me that the first demand was pro-rata (i.e. from the date the property was purchased), this time they are for a full year.

Is the non-resident income tax in Spain really 168.43 EUR per year? We have zero income in Spain and use no social welfare.

Sorry we're still learning the ropes here, if this the way things are, so be it. We've just had conflicting information on other matters in the past so I want to make 100% sure.

I cant use the correct legal words that the tax office use because my solicitor does all my outgoings and I don't know them, but your amount does seem a little on the high side, I am also non-resident and mine are not like yours.

The tax office in Spain presumes you might rent your property out so they...(I will be corrected if this is wrong)...Tax a certain amount on the understanding you might rent it out, no matter you don't.

One thing I will mention is that when I owned one place I used to send amounts of money over quite regular to our Spanish bank account, for my kids to use when they visited, us when we went,  etc, I stopped these larger amounts for no apparent reason and just sent a little now and again, or I went into the bank and paid in enough €€€'s to cover bills..Just..And this bit I am sure about, my tax bill came down for the following tax years, coincidence or what? but they did.

To be honest here you should either employ a good solicitor, and seek decent tax advice if you are not happy with the situation, they know more then me or anyone else.

@baz1946, thank you for your pointers.. that's useful to know.

I will go back to our solicitor and ask them to ensure that the tax authorities know we are not renting the property. So far I've just had very brief replies and they haven't been interested in looking into it any further.

You should find it all explained here. It is an imputed tax based on the catestral value.

http://www.advoco.es/most-requested-services/37-spanish-tax-form-210.html

Regards

boggey79, in a country where backhanders and corruption reign supreme ( these days there are as many Brits scamming the system as Spanish here  ) the tax office will never  believe a 2nd home isn't rented out.  So suggest you just accept you have to pay and save your time and energy for more important issues.

@juansheetisplenty and @floella, thank you for your comments. 

I don't plan on wasting any time on this, I'll happily pay it... Just found it a bit odd that's all.

As said by a previous poster it is calculated on the catestral value. We actualy use Abaco the company that sponsors this publication they do all the paperwork and inform us of thevtax and srange for it to come out of our account to be pain we only purchased last july therefor only 6 months tax to pay and our bill was €24 as near as dam it split between my wife and myself.

Although this tax is often referred to as "imputed" that you rent it out, this is another bit of the expat rumour mill. In fact, you pay this tax if you do NOT rent it out. A different tax applies on rental income. You derive a benefit from owning property in Spain (as a holiday home, getting your bins emptied, street lighting and all the other things provided by the council) and it is this benefit that attracts the tax. Just like you pay council tax for the whole year on second properties in UK even if you only use it for a week or two.

It ranges, depending on the region you live in, from 0.45% to 1.16% (eg Alicante is 0.68% whilst  Murcia is 0.79%) of the cadastral value (rateable value of the property not the cost) and the tax on that is between 24 and 24.75%. You can find the cadastral value on your IBI bill. If that value is, say, €50,000 then 0.7% is €350. 24.75% of that is €86 ish. 

IF the property is rented, then tax should be paid on the rental income and is not included in the IBI.

IWe paid €44 and a few cents each for apartment in Peñiscola. It is a 3 bedroomed apt and the tax we paid this year is the same as last year. You add the catastral value of your house/apt and garage together and work it out from there. I download the forms and go into our bank when in Spain and pay over the counter. It is relatively straightforward if you read and follow ALL the instructions on the website (in english). I hope the link works

https://www.agenciatributaria.gob.es/AEAT.sede/en_gb/tramitacion/GF00.shtml

163.43 EUR x3 does seem rather a lot of money. Perhaps it's also the fee for calculating it as well. Some solicitors do charge a set (enormous) amount per year. Ours used to 250 EUR per year whether we asked for advice or not. Now we just pay someone to do our non resident tax of about 50 EUR each.They charge a more reasonable £40. Of couse it could also be 163.43 EUR to be divided by 3. That would be high but not unreasonable. Do continue to query it. Good luck.

@GB45 I thought the same. Somebody else mentioned here that they could be bundling in their own fee. But they already charge us separately on an annual basis for the fiscal services they provide so that would be a bit cheeky!

As they've only sent me a generic invoice with no breakdown I will ask them to specify what their fees are and if possible to provide a copy of the statement issued directly from the tax authorities in Spain.

I agree, that figure will also include the solicitors annual fee otherwise you would be living in a very expensive house. . Ours used to charge €172 a year just for doing our residents tax returns (the IBI was paid to SUMA on direct debit). We now use a gestor who charges €50 a year to complete the tax returns.

I am a non resident with a property purchased 8 years ago near the coast of the Spanish, Costa Blanca simply because the local Governing Council have failed to grant the Habitation Certificate on the complex we have purchased. A joint purchase between husband & Wife we are charged double by our Spanish Bank. Our Bank in Spain has changed from Halifax to LLoyds, now it has become Saberdell. we have not been out to our apartment for 3 years because of the dirty deals of the Builder Idearco, who has been up to so many tricks and not completed the areas individual owners have paid him for. The Spanish Lawyer also failed to do the work he was paid to do. now I could write a book on the problems all the purchasers have and still are suffering.  

When will the Spanish governing bodies sort out all the problems that so many purchasers are putting up with. Where can we get justice 8 years and we are still waiting. Will we live to enjoy the Dream that so many are waiting to enjoy.

When will all the crooked deals of Lawyers & Builders in Spain be sorted out. Who can we go to without the huge charges of another Lawyer.

This message was last edited by Poedoe on 25/10/2014.

This message was last edited by Poedoe on 25/10/2014.

This might be helpful re form 210:-

Location of the property (only for income types 01, 02 and 28)'
Again self-explanatory but try to complete the address in the same way as it is shown on the IBI receipt.

'Determination of the taxable base amount'
Box [04] Your valor catastral multiplied by 1,1% (2% if the last revaluation was prior to 1994)
Box [21] 24,75 (If you are submitting late returns for 2011 this will be 24,00)
Box [22] The result of taking 24,75% of box 04
Box [23] Enter 0 or leave blank
Box [24] Same as 22
Box [25] Box [26] Box [27] Leave blank. This tax is not covered by the double taxation agreement.
Box [28] Same as 24
Box [29] Box [30] Enter 0 or leave blank
Box [31] Same as 28 (boxes 22, 24, 28 and 31 should show the same amount)

Please note that if there is more than one person named in the escritura a return is required from each person. The amount to be entered in box 4 is halved if there are two owners, divided by three if there are three and so on. So the formula to obtain the amount to be entered in Box 4 is:

valor catastral times 1,1% (or 2% if the property has not been re-valued, although I believe most have been). If more than one owner,  divided by two (or however many owners there are)

Please also note that the reference in the AEAT English instructions to 'property register value' is one of many errors and mistranslations and you must use the value as the 'valor catastral' which is more correctly translated as the rateable value.

Hi John,

Many thanks for your reply. We did not buy the apartment to let it out and make an income, We would like to move to Spain but are concerned that we would have problems without the Habitation Certificate. The Spanish home is for our use only. We are both registered as owners because we are in our 70s therefore we are hit for double charges. It would be very difficult if one of us were left on our own & the reason we are both registered as owners.

Regards P.

You are double hit as you say, as the charges (non resident property owners tax, form 410) are divided between you.

Unfortunately, when one dies the other will have inheritance tax to pay. on their share of the property,  as you are both non-resident.

If you both live here then there will not be IHT to pay.

I would agree that you need to check how much was for tax and how much was your solicitor's charge.  From our own experience, our solicitor fee was more than the actual tax charge once we no longer had to pay wealth tax. I think the last time we used his servides the charge was in excess of 100 euros and the tax was about 56 euros.  That was for each of us.  That opened my eyes and since then have completed the forms and paid the non-resident tax myself. 

Your non-resident tax should be based on the Catastral value of the property (from what our accountant tells me.) It has to be paid between all the owners on the Escritura. Our Catastral value is actually very low as we are still waiting for the property to be reassessed after purchase. We have been told the value will go up quite alot as this has not been done since the 1970's! But we should still be paying no more than Eu200 pa total. 

Our accountant asks for a copy of our paid IBI bill (for last year) and works it out from the Catastral value there.

She charges us Eu50 per person to do this for us. 

Hope you get it sorted :) 

The bill will almost definitely include the Solicitors fees for doing the documentation- They don't break it down as a seperate item as you will clearly see how much of a rip off it is for around 10 minutes work. We pay around 24 euros each in non-residents tax and pay a company about 40 euros a year to do it for us.

My last post to Poedoe should have read "

You are NOT 'double hit'  as you say, as the charges (non resident property owners tax, form 210) are divided between THE OWNERS.