Fiscal residency as a property owner?


This topic contains 2 replies, has 2 voices, and was last updated by Profile photo of Igurisu Igurisu 3 years, 7 months ago.

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  • #57363
    Profile photo of Igurisu

    With all the recent changes in spanish law relating to residency, fiscal or actual, taxation on all assets I have a couple of questions if anybody can help?

    My father owns a property in Spain (he spends less than 90 days per year there).
    As a property owner is he classified as a fiscal resident?
    If yes, does that mean he should declare all his UK assets for the Spanish government to potentially tax him on those assets?
    I assume there will be some avoidance of dual taxation, but are the UK tax laws and the Spanish tax laws similar? For example, are there instances where my father may not be liable for tax in the UK but still liable for tax in SPain?
    My father is 80 years old and so retired, does this affect the circumstance and situation?

    Then for myself
    My father is in reasonable health but the reality is that my brother and I will inherit the property.
    Does that then make us fiscal residents of Spain?
    In the case of yes, we then have to declare our assets in the UK and potentially pay tax in Spain?

    We are seriously thinking that my father needs to sell the property, even in the current market. To be honest, it would be cheaper to give the property away completely free than incur taxation on my fathers/my brother and I UK/global assets (my brother owns another property outside of Europe).

    Thanks in advance for any clarity on the above.

  • #116345
    Profile photo of Anonymous

    Hi Pete,

    Just the fact that you own property doesn’t make you fiscally resident until you start breaking the day limits. So in your father’s case he is fiscally non-resident and only liable for the imputed tax on renting the property out. He is NOT caught by this law and therefore does NOT need to declare any assets to the Spanish Government.

    Again on inheriting the Spanish Property, this doesn’t automatically make you and your brother Fiscal Residents unless you start breaking the number of days ceiling. However, you will be liable for Inheritance Tax that you personally will have to pay, and only then will the Estae be release to you. This is different to the UK system, where the ‘Estate’ pays the tax, and then it is release from Probate to the inheritors.

  • #116350
    Profile photo of Igurisu

    Hi Mike,

    Thank you very much, that makes sense and I feel much more confortable.

    I was aware of the inheritance tax so thats not unexpected, we’ll just have to deal with that when it happens.

    Thanks again

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