Property Purchase in Pollensa

[lollipop]

Even though you may not need to pay a wealth tax as a nonresident I believe you are still liable to complete a tax return. They assume that you rent out or gain from having a second home in the sun. I think it is calculated as 24% of 2% of the castoral valor which you find on your rates bill. Those percentages may be the other way round maybe someone who has completed their return can correct me.

[Nick]

Thanks for that.
Perhaps someone can advise then?

[Smiddy]

Originally Posted by nickpaulanoah

Thanks for that.
Perhaps someone can advise then?

Thank you very much for your post, i'm sure we'll find it a great help.

[alcanadakid]

Originally Posted by nickpaulanoah

Spanish wealth tax 2012 guide
The wealth tax returns to Spain but you probably won't have to pay it
A wealth tax is a tax on a citizen's total assets rather than income. Spain had such a tax up until 2008 but then instituted a 100% allowances effectively abolishing or suspending it. Until now when the government has brought it back as a temporary measure for the 2011 and 2012 tax years i.e. the tax declarations being made this year and next in respect of the previous calendar years.

This guide describes how the "new" tax will work focusing firstly on the allowances which mean, for all but the very wealthy, that their wealth tax will be zero.

Spanish wealth tax allowances:

Every taxpayer has the first €700.000 of their assets exempt from tax

€300.000 can be deducted from the valuation of the family home before it is added to the total asset calculation

These two limits were, respectively, €108.182 and €150.253 the last time Spain had a wealth tax so far fewer people are going to be faced with an extra bill this time. It is estimated that only 160,000 people will pay a total of €1 billion.

Operation of the tax:

The wealth of an individual is deemed to be their property, vehicles, jewelry, furs, antiques, intellectual property rights, savings and other financial assets. Their total valuation on the last day of the year is subject to the tax.

Property is to be valued at the higher of the "catastral valor" (official value on the property register) and the value in the deeds. For older properties in particular these are both values which could easily be substantially below market levels. This reduces still further the chances of you having to pay the tax.

Taxation of husband and wife:

Both are assessed separately. Jointly owned properties (and other assets) are split between the two, so usually only 50% of a house's value is carried forward to the asset total. In terms of the family home allowance this is divided between the husband and wife, so it is €150.000 each.

Spanish wealth tax rates:

After the taxpayer's wealth has been calculated (total minus family home exemption minus 700.000 allowance) then the following rates are applied:

Note on regional differences: This tax has been highly politically controversial with the right of centre PP opposing it. The tax is collected by the governments of the autonomous regions who have the right to change the rules locally. Some PP regions have apparently done so to make it more lenient, like those in Murcia and Valencia. For the details look at their government websites.

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The bit containing the rates did not come out but hopefully this helps everyone who's an owner?

It appears to me that you have to have assets of over 700,000 euro's so a lot of us, inc. me, are exempt?

P.S. - this came from "Googling" "Spanish wealth tax" and brought up ADVOCO, Spanish lawyers and accountants.

Hope it helps.

Brilliant report!

[illeslex]

Good afternoon,

Our Law Firm is interested in clarifying the Wealth Tax.

The mentioned tax has temporarily been reestablished for the years 2011, 2012, 2013 and 2014, accruing on December 31st of each of these years.

A reduction of the taxable base regarding the exempt minimum of 700.000 Euros has been adapted for not only residents but also for non-residents.This is as aspect to be taken into account by you.

Therefore, all persons are required to declare, whose declaration results in a payment of the taxes and in any case, those whose properties and rights, which are valued in more than 2.000.000 Euros, although the quote results negative.

Another point to highlight is that only natural persons are taxed. Companies are not going to suffer this particular tax at all.

The tax rate ranges from 0.2% to 2.5%, depending on the scale of the tax.

Kindest regards,

[Rockape]

Not sure where else to post this, seeing as its last been used in 2014, but just wanted to comment on the seemingly big reduction in properties for sale in PP.

Just wondering if anyone is up to date with the local property market to suggest if its due to lack of sellers (fewer than usual) or because there is a glut of buyers? (more than usual)

[Gommar Goffer]

I am seeing plenty of For Sale signs. Rightmove currently has 346 properties, ranging from 130k to 5+m (All of Habitat)

[bobley]

Couldn't help but look myself. Surprised to see many of the houses I looked at over 4 years ago are still on there!

[Rockape]

Originally Posted by Gommar Goffer

I am seeing plenty of For Sale signs. Rightmove currently has 346 properties, ranging from 130k to 5+m (All of Habitat)

From my experience, Rightmove tend to keep stuff on their site for years after they've been sold, so don't take any notice of that anymore. Balearic Properties always seem to have loads but most of the stuff on their site is sold or reserved.