Friday, 4 July 2014

Taxation for Spanish Buyers

Last week Spain announced a number of new tax measures to be implemented over the next few months.

Residential Tourism

The new bill does not go far enough according to a number of experts and legal advisers for buyers in Spain, particularily around the areas classed as residential tourism.

A panel of appointed advisers had put together a number of new measures for the goevrnment to consider which along with tax breaks for investors moving into Spain inlcuded a relaxation of the tax rules applying to income from rental.

Due to the fact that for foreign buyers other countries have much more favourable tax sytems in place and the fact Spain has a high taxation level in comparision to their own country of residency it was deemed important by the legal advisers that Spain focussed on how to attract investors and put Spain back on the tourist map.

In  the new bill nearly all the recommendations have been ignored and Spanish property taxes on income generated for foreign buyers outside the EU will remain high and in many cases unfair.

What next for non resident buyers in Spain

Foreign buyers outside the EU will remain open to the possibilty that the Spanish tax office will assume a rental income whether generated or not and ability to offset costs of a spanish mortgage or other running costs will remain impossible to do.

The experts who put together the propositions for the changes will continue to fight for the points made and it can but be hoped common sense will prevail. What seems to have been missed this time round is the level of indirect taxes an outside investor invloved in residential tourism generates.

Read the full article: tax situation for non resident buyers in Spain


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