Lost in Translation.. A simple tax question

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    • #53937
      Anonymous
      Participant

      Unfortunately we don’t yet have the Valor Catastral for our apartment in Spain.

      My wife is struggling to translate the following.. Can anyone advise on what figure we use .

      Thanks
      JP

      Si a la fecha de devengo del Impuesto los inmuebles a que se refiere este apartado carecieran de valor catastral o éste no hubiera sido notificado al titular, se tomará como base de imputación de los mismos el 50 por 100 de aquel por el que deban computarse a efectos del Impuesto sobre el Patrimonio. En estos casos, el porcentaje será del 1,1 por 100.

    • #82357
      Anonymous
      Participant

      I may be wrong, but the essence of the text suggests that if you are not married/resident, the tax will be 50% per person, but if married then 100% of the whole/joint.

      This is common in CGT (capital gains tax) when 1 partner is resident and the other is non res.

      The usual 3% retention for the non res would then be 1.5% and the resident liable to pay their % of the CGT at 9%, being half of the 18%.

      I´m beggining to think that a Spanish lawyers translated explanation will make more sense than mine 😯

    • #82365
      Anonymous
      Participant

      Hi Peter,

      Reading your post I have realised that I have been too brief with my question!!

      The question was about the value we use to calculate.. “Impuesto de la renta de no residentes, declaración ordinaria (IRNR)” in the absence of the valor catastral, which has yet to be issued by the local council

    • #82366
      Anonymous
      Participant

      As I understand it, without your valor catastral, you use 50% of the escritura value and apply an income tax base of 1.1% of that.

    • #82368
      Anonymous
      Participant

      In absence of cadastral value, you must use the provisions established for the ‘Impuesto de Patrimonio’ or wealth tax in order to calculate the value of your property.

      Section 10 of our wealth tax Act provides that you have to choose the higher value among:

      1º Cadastral Value. You don’t have
      2º Official value used to calculate another tax such as Transfer Tax ITP or Inheritance tax
      3º Escritura value

    • #82422
      Anonymous
      Participant

      Hi SpanishLawyer,

      Just to confirm are you saying that I use the escritura value to calculate the tax we pay on the notional income that we receive for renting the property.

      If so that is crazy, because what it means is that I am paying extra tax because it takes the local council over 2 years to issue the valor catastral.

      I own 2 properties in Spain, neither are rented. The first is a 3 bedrooom apartment, (our holiday home) and the valor castral is 60,000. The second in the same resort is 2 bedroomed and was bought at a later date for 187,000.

      So I pay 3 times the tax (for imaginary rent) on a 2 bedroomed property than I do for a larger and more expensive 3 bedroomed property!!!

      Can I claim this extra tax back when the valor catastral is issued??

    • #82427
      Anonymous
      Participant

      As said above, for WEALTH tax you have to use the higher of the escritura/catastral value anyway.
      For IRPF/RENTA you have to use your escritura value in the absence of a valor catastral. If there are 2 owners then, using the figures you have given, this will only result in paying an extra 168ish euros each, which some might say, seeing as you are in the fortunate position of owning multiple properties, isn’t much to be worrying about!
      Valor catastrals are being revised upwards so are gradually coming into line with declared values anyway and from next year, no wealth tax!

    • #82428
      Anonymous
      Participant

      If you’ve owned the property for over 2 years, then you must have submitted a tax return last year so why not just use the same value as you did in 2007?

    • #82449
      Anonymous
      Participant

      HB,

      Yes you are correct I guess my wife and I are fortunate for owning 2 properties in Spain.

      The tax on notional rent we will pay on the second property is 493 Euros and 158 Euros on the first. When using the escritura and valor catastal respectively.

      This is almost 700 Euros in tax for income we do not receive, my complaint is more to do with the system than the value. It highlights the illogical tax system. 3 times the tax on a property worth 50% less than the other, seperated by about 150 metres and constructed only 4 years apart

      It’s the first year for submission of tax on the second property but we have been told that is will be another year before a catastral value will be issused. Furthermore the first was purchased for 118,000 but the valor catastral today after being revised 3 times is still only 60,000. Hence why I have difficulty in understanding the disparity.

      You would be not too pleased if you knew your were paying 3 times the council tax on your home (if you have one in the Uk), than your neighbour when you property is half the size.

    • #82460
      Anonymous
      Participant

      I’m in the same boat, waiting for a valor catastral on a property I own and will have to use the escritura value too, but I’m resident.
      As non-residents, because you own more than one property, you are obliged to appoint a fiscal representative in Spain (you can be fined up to 6000€ if you don’t). Assuming you appoint a gestor, accountant or other tax/financial expert they should be able to advise re claiming back any overpaid tax.

    • #82626
      Anonymous
      Participant

      Is it true that wealth tax is to be abolished from next year? Is the renta tax affected in any way?

      Thanks for any answers.

    • #82627
      Anonymous
      Participant

      Yes, wealth tax is to be abolished. IRPF (Renta) is not affected.

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