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6 Good Reasons
Foreigners often think that taking out an official residence permit in Spain will cost them money and expose them to Spanish taxes which non-residents can avoid. The truth is often the reverse. The resident property owner has a number of tax advantages over the non-resident.
1. If you are resident and more than 65 years of age, and you have lived in your home for three years, you will not be subject to Spanish capital gains tax when you sell it, no matter how great your profit.
2. If you are a resident, your maximum capital gains tax is 20 per cent, or even less, whereas the non-resident pays 35 per cent.
3. If you are resident and you sell your property, you are not subject to having 5 per cent of the total purchase price withheld and deposited with Spain's tax agency as a guarantee against your tax liabilities.
4. If you are a resident and you bequeath your home to a spouse or child, who is also a resident, you can probably avoid Spanish inheritance tax on 95 percent of the valuation if you have owned and lived in your home for a minimum of three years. The inheritor must undertake not to sell the property for 10 years, while continuing to be a resident. Top limit on the 95 per cent reduction is 120.000 euro. Over that sum you must pay.
5. Spanish property owner's imputed income tax does not apply to the owner's principal residence. A resident of Spain also has an exemption on the first 108.000 euro of valuation for Spanish capital assets tax (wealth tax). If a husband and wife jointly own a property worth 120.000 euro, and they are non-resident, they will have to pay a non-resident property owner's income tax of 600 euro each year along with 250 euro Spanish wealth tax - a total of 850 euro per year. A resident is exempt from these taxes. For wealth tax the exemption is 108.000 euro each for husband and wife.
6. If you really live most of the year in Spain, you are violating the law if you do not obtain a resident's card. The law says that your tourist stay, even as a European Union citizen, is limited to 180 days per year. You can be fined 300 euro if you overstay this limit.
SPANISH LAW is a service of Ubeda-Retana y Asociados, offering you a complete range of legal and tax services in Fuengirola, with Spanish lawyers and tax consultants who speak perfect English, as well as German and French.Ubeda-Retana y Asociados, Calle Cordoba 37, Fuengirola. Tel: 952-667090
http://www.lawtaxspain.com/
Return from 6 reasons to Spain Holidays Advisor
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