Spanish property owners

[Dnk]

Do we have any Spanish property owners who are renting out 

their property ?

Have I got the latest tax situation right ?

You pay Spanish tax on the profit after costs etc at 24% and paid every 1/4 if non resident but don't pay any tax here in the UK 

[SupraAyf]

Hi Dunk, that sounds about right mate but you'll still have to declare your rental income (and any Spanish taxes paid) to HMRC by way of your UK tax return.

I believe you can offset some of the Spanish tax which you paid on your rental income under the terms of the UK's double tax treaty with Spain.

If you've not already pinned down the exact process by the time you read this post then drop me a line as I know someone who will be able to give me the exact facts as they stand now.

All the best,

Andrew

 

[Dnk]

Hi Andrew 

If you have someone and its not a bother for you that would be great, I'm reading conflicting info regarding this, mainly if I use a Spanish based agent to manage my villa then I can claim expenses including their fees and offset against the tax in Spain

Also not sure exactly where you stand with HMRC 

Regards

Dunk

Edited May 6, 2021 by Dnk (see edit history)

[grahamc]

I believe double taxation treaties are quite similar and I had to deal with the Swiss one a few years back. As above, you can declare expenses and income in original country (Spain), however you still need to declare income and expenses (including tax paid in original country) in the UK. 

[Krimi]

Hi, Im from Spain, and as a resident I need to pay 25% of the total profits, not incomes of the property every 1/4, which name here are “trimestrales”, you can decrease your payments just showing your property expenses, here in Canaries also we have a reduced taxation for properties and a good “reinvestment plan” by the government that if you reinvest the money that you take of profits in 5 years time onto a new property or property upgrades (like swimming pool, new decoration, blablabla) so in this way you are exempt of taxes on your real state business. 
 

Here it depends on which location you have your property.

 

Hope that I help you.

Edited May 11, 2021 by Krimi (see edit history)

[Dnk]

Thanks for your input Krimi, the rules are different for a non resident, from what i've read they have just 

reduced the stamp duty and purchase tax in Andalusia which certainly helps.

I haven't bought yet and just looking into selling a rental property i own here. I've had enough 

of the UK law regarding tenants and pretty much letting them get away with anything. Just in the 

process of legally getting my property back after the tenant has done £1000's of damage, non payment 

of rent and appears to have left but i still need to jump through hoops, it really is a farce here hence looking 

at a villa to rent out for holiday lets and in theory a lot less can go wrong 

[Krimi]

On 5/12/2021 at 9:11 AM, Dnk said:

Thanks for your input Krimi, the rules are different for a non resident, from what i've read they have just 

reduced the stamp duty and purchase tax in Andalusia which certainly helps.

I haven't bought yet and just looking into selling a rental property i own here. I've had enough 

of the UK law regarding tenants and pretty much letting them get away with anything. Just in the 

process of legally getting my property back after the tenant has done £1000's of damage, non payment 

of rent and appears to have left but i still need to jump through hoops, it really is a farce here hence looking 

at a villa to rent out for holiday lets and in theory a lot less can go wrong 

You should check the change here in laws also, because here for non-residential properties, "FOR RENT, VACATION USAGE" the law here in Canaries is "VIVIENDAS VACACIONALES" and have different treatment in terms of incomes and taxes. Check it in Andalucía, and why not to invest that money here in Gran Canaria? A lot of Villas and lots and lots of apartments that in "No COVID" conditions are always full of people, good ROI's here.

[Dnk]

There is an area I really like in the hills near Competa and Frigiliana. I do like the white washed towns there 

and the quiet lifestyle. 

Short cheap flights to Malaga from B'ham and also the option of driving there which I did in 2015 make it

even more attractive

I'd imagine I'll be pretty much under the same rules as mainland Spain, I've been to Lanzarote but not Gran Canaria. 

I'll have to take a look 

[scorling]

 I have a place near Torrox, due south of Competa. It is a beautiful area although on the edge of the mountains, Competa can be very cold in the Winter. Frigiliana is beautiful and Nerja is a great town.

I guess you are aware of the licensing requirements if you are doing holiday lets less than three months? 

 

[Dnk]

14 hours ago, scorling said:

 I have a place near Torrox, due south of Competa. It is a beautiful area although on the edge of the mountains, Competa can be very cold in the Winter. Frigiliana is beautiful and Nerja is a great town.

I guess you are aware of the licensing requirements if you are doing holiday lets less than three months? 

 

Yes I think so, registration of the property with the Junta de Andalucia, Guardia Civil, I have good info 

from a local agent in Competa covering exactly what has to be done to be 100% legal and are offering me

a management of the villa to what ever level I require 

 

[Dnk]

Searching around i found this which looks very promising to get a visa then permanent residency 

https://www.spanishpropertyinsight.com/2021/04/21/moving-to-spain-from-the-uk-2021/

Quickly looking through it I could possibly go this route and apply for the

Spanish non-lucrative visa

For those wishing to live in Spain and who can provide evidence that they are able to support themselves, a non-lucrative visa is available. This is the visa that is often used by people who wish to retire to Spain as well as those wishing to study there.

It has financial minimums which must be met and does not permit working in Spain or carrying out any type of economic activity, although some visa holders do sometimes work remotely in Spain for a business located in another country. While the authorities often accept this, it may be grounds for refusal of a non-lucrative visa.

The initial application must be made from outside Spain. The visa allows the holder to live in Spain for one year. To renew it, the individual must have spent a minimum of 183 days in the country. This means that they will be resident in Spain for tax purposes and will be required to pay Spanish tax on all income, subject to allowances in respect of double tax treaties.

The visa grants temporary residence for a period of one year with the option to renew it twice for up to two years. If the visa is renewed a third time, then the holder is granted long-term or permanent residency.

The financial limits, based on Spain’s public index figures, are a minimum of €27,115.20 in a bank account or a minimum monthly income of €2,259.60.

Edited July 20, 2021 by Dnk (see edit history)