- This topic has 33 replies, 6 voices, and was last updated 10 years, 7 months ago by
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As nonresident property owners we have brought an awful lot of money into the Spanish economy – not least the cost of our properties and their continuing maintenance. Yet we have no representation and are regarded as milch cows by the authorities, not least In the case of the iniquitous imputed income tax. We are also discriminated against in other ways. The Foreign Office has refused to do anything on our behalf. What we pay them for, I do not know. I have done what I can with a number of successful complaints to Brussels. What else can we do to make ourselves heard?
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It never fails to amaze me that people think that foreign office will take action on behalf of a citizen. I feel that if we have concerns/issues we advise them in order that it is on record and after that there is no point in wasting time & energy with them
We just have to continue in what ever way we feel is effective at any given point of time.
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@Arthur wrote:
How many? Certainly many times less than non Spanish nonresidents.
What do you mean how many? All of them have to pay it.
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@Arthur wrote:
How many? Certainly many times less than non Spanish nonresidents.
Anyone with a second home has to pay the ‘imputed rental income tax’ on their non-primary residence regardless of nationality. Being a non-resident means your property in Spain is de facto a second home thus you pay the tax on it. If you became a Spanish fiscal resident and lived in that property as your primary residence you wouldn’t be liable for it. The same principle applies to everyone else.
Your main gripe seems to be that because the UK doesn’t apply this system neither should Spain. Spain isn’t the only country to do this—the Netherlands does too, so do many other EU countries. The UK is the odd one out here and (in my opinion) should apply this system in the UK too.
I know that doesn’t fit in with your ‘we’re being persecuted for being foreigners’ gripe, but facts and reality have a habit of doing that.
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@shakeel wrote:
It never fails to amaze me that people think that foreign office will take action on behalf of a citizen. I feel that if we have concerns/issues we advise them in order that it is on record and after that there is no point in wasting time & energy with them
We just have to continue in what ever way we feel is effective at any given point of time.
Exactly. Some seem to think it’s there to act as a Travel Rep!
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@Arthur wrote:
Few Spaniards have assets abroad (This is Money). . .
Can you back that up with facts?
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Irrespective of how many Spaniards owns a property outside Spain. The question does not arise as in UK there is no
imputed tax. Hence the tax is on non residents.Without having the stat’s it is obvious to me that more of non resident Brits have a property in Spain than Spaniards in
UK. The Spanish Government is well aware of this and see’s this as a nice source of revenue and in relevant terms
more Brits are paying this tax.Another tax is the Wealth tax that we do not have in the UK. This takes me to another consequence of wealth Tax.
If you already have a half decent property in a half decent area with no mortgage & you decide to buy another so called bargain property of course this will be without mortgage and this will push you into wealth tax bracket.You will now pay two IBI even though you are not there majority of the time to use the facilities,two imputed taxes Wealth Tax, gastos de commundad etc,etc.
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@Arthur wrote:
Few Spaniards have assets abroad (This is Money). In reality this is a tax on foreigners.
I actually mentioned Spanish residents rather than Spaniards. So all those non-Spaniards who have taken up residency in Spain have to pay an imputed tax on property they hold outside of Spain as well (unless they declare rental income).
It doesn’t really matter how many pay it, or indeed how many evade it, the point is the law is the same for Spaniards and non-Spaniards alike. There is no descrimination in that sense. However it is a lot easier for hacienda to chase after imputed tax on property that is in Spain rather than property held overseas, so you might be able to argue that hacienda is being descriminatory in who it goes after, but there’s not a lot you can do about that.
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@Arthur: Yes it does apply to all nationalities. As the focus was on Spaniards & Brits I did not bring them into the mix.
@ Chopera: and how do they calculate the tax on the British properties i.e. valour catastarol, & the percentage etc. ?
Like all things in Spain they just do not think it through and a just take a knee jerk actions to situations that extremely complex i.e. international laws, reciprocal agreements, financial & diplomatic fall out & lets not even talk about the standing of Spain. Prior’s are a good example.
The above is coming from some one who loves the country & all ways forgives the Spaniards. However others may not share my sentiments if their lives savings have been cleaned up with no recourse.
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@Arthur wrote:
Few Spaniards have assets abroad (This is Money). In reality this is a tax on foreigners.
What’s it got to do with assets abroad? Did you read and understand the post I made above because it was all explained (I thought) fairly clearly. Perhaps it wasn’t so let me clarify.
The ‘imputed rental income tax’ is a tax on second properties. That property can be in Spain. In other words if any nationality (including Spanish) own two properties in Spain they have to pay the imputed rental tax on the second one, not deemed their principle residence.
Plenty of Spaniards have second holiday homes in Spain. How do I know this? The building my flat is located in is principally Spanish owned, with most of them being vacant throughout the year.
As I mentioned previously, why let facts get in the way of a good moan and gripe.
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I am well aware of how the imputed tax works. The fact remains that it is paid by many more foreigners than Spaniards. In our case it is taxation without representation, which is the point I was making. By the way, it is “principal” residence.
My latest gripe re discriminatory IHT is currently awaiting a hearing before the European Court, the Spanish Government having failed to comply with a European Directive to get their house in order. -
@Arthur wrote:
I am well aware of how the imputed tax works. The fact remains that it is paid by many more foreigners than Spaniards. In our case it is taxation without representation, which is the point I was making. By the way, it is “principal” residence.
My latest gripe re discriminatory IHT is currently awaiting a hearing before the European Court, the Spanish Government having failed to comply with a European Directive to get their house in order.While I agree that unfair tax policies are frustrating, I would never move to a foreign country and not expect to be treated differently, tax-wise.
What makes you think you deserve ‘representation’ when you aren’t a citizen? Who should be Spain’s top priority – easing the suffering of its poor and unemployed or dealing with your relatively trivial problem (compared to other problems in Spain) ?
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@shakeel wrote:
@ Chopera: and how do they calculate the tax on the British properties i.e. valour catastarol, & the percentage etc. ?
…They use 50% of the original purchase price as the valor catastral, and apply a 1.1% tax on that value.
EDIT: I should add that this probably works out as more than the inputed tax for property in Spain owned by non-residents, since the valor catastral in Spain is usually less than 50% of the purchase price. However I really doubt that most Spanish residents with property outside of Spain are aware of this tax, let alone pay it.
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@GarySFBCN wrote:
@Arthur wrote:
I am well aware of how the imputed tax works. The fact remains that it is paid by many more foreigners than Spaniards. In our case it is taxation without representation, which is the point I was making. By the way, it is “principal” residence.
My latest gripe re discriminatory IHT is currently awaiting a hearing before the European Court, the Spanish Government having failed to comply with a European Directive to get their house in order.While I agree that unfair tax policies are frustrating, I would never move to a foreign country and not expect to be treated differently, tax-wise.
What makes you think you deserve ‘representation’ when you aren’t a citizen? Who should be Spain’s top priority – easing the suffering of its poor and unemployed or dealing with your relatively trivial problem (compared to other problems in Spain) ?
And there was I thinking we were all citizens of the E U!
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@Arthur wrote:
@GarySFBCN wrote:
@Arthur wrote:
I am well aware of how the imputed tax works. The fact remains that it is paid by many more foreigners than Spaniards. In our case it is taxation without representation, which is the point I was making. By the way, it is “principal” residence.
My latest gripe re discriminatory IHT is currently awaiting a hearing before the European Court, the Spanish Government having failed to comply with a European Directive to get their house in order.While I agree that unfair tax policies are frustrating, I would never move to a foreign country and not expect to be treated differently, tax-wise.
What makes you think you deserve ‘representation’ when you aren’t a citizen? Who should be Spain’s top priority – easing the suffering of its poor and unemployed or dealing with your relatively trivial problem (compared to other problems in Spain) ?
And there was I thinking we were all citizens of the E U!
Gary is a citizen of the USA
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@Arthur wrote:
By the way, it is “principal” residence.
If it’s a ‘principal’ residence then you shouldn’t be paying the ‘imputed rental income’ tax on it. That’s only payable on second properties that are not ‘principal’ residences.
But I suspect your interpretation of ‘principal’ residence is somewhat different to mine and the hacienda’s. Just because your property in Spain is your ‘principal’ residence there doesn’t make it a ‘principal’ residence in the eyes of the tax authorities. A principal residence is one you live in most of the time. Given that you are not a fiscal tax resident of Spain means you don’t spend more than 183 days a year there meaning you live somewhere else for more than 6 months of the year. Ergo it is not your principal residence and therefore tax is payable.
If you don’t like it – move somewhere else.
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@Arthur wrote:
I was merely correcting your spelling of “principal”. Why should I move? I have had my house since 1980 – long before the introduction of imputed income tax.
Taxes come and go. If you bought in 1980 then you are well up on the deal, even taking into account a bit of imputed income tax.
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@Arthur wrote:
I was merely correcting your spelling of “principal”.
I’m aware of what you were doing. Correcting someone’s spelling is the last resort of someone who has nothing better to say really.
@Arthur wrote:
Why should I move? I have had my house since 1980 – long before the introduction of imputed income tax.
So you don’t like change then?
Either accept it and live with it or move somewhere else. Your choices seem relatively simple to me.
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@Garry: Spain maybe going through its problems but let us not forget that.
a) Tax was there before the current state of Spanish economy.
b) The country should have had the wisdom to see that nothing is for ever and one day money from foreignors buying will stop or decline when the market reached a saturation point.
c) It has been collecting taxes from illegal builds knowing or should have been knowing the legal status of those buildings in questions.
d) People who were the conduits to ( c) above have not been punished to show the gravity of their crimes.
e) Until recently non resident paid a higher capital gains tax ( thanks to people like Arthur that this had changed) In France local & EU citizen pay the same.
Spain had been used to milking the foreignors . The EU funds or simple people like us who post on the forum.
The thousands of Olive trees that use to be feature of the Andalucian country now being used for solar panels. Guess where the money is coming from ?
I have a friend of mine from Seville, his whole business model is based on getting grants from EU.
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@Arthur: you are well come & keep up the good work. Just accepting the unfairness is the apathy that Government/local Council’s rely on.
The bigger picture is quite clear here to extort the non residents y punto. The extortion is nothing new it has been going since the days of Franco. The situation did not get exposed due to lack of communication, Spain being not being in EU and Spain being very cheap.
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@shakeel wrote:
@Garry: Spain maybe going through its problems but let us not forget that.
a) Tax was there before the current state of Spanish economy.
b) The country should have had the wisdom to see that nothing is for ever and one day money from foreignors buying will stop or decline when the market reached a saturation point.
c) It has been collecting taxes from illegal builds knowing or should have been knowing the legal status of those buildings in questions.
d) People who were the conduits to ( c) above have not been punished to show the gravity of their crimes.
e) Until recently non resident paid a higher capital gains tax ( thanks to people like Arthur that this had changed) In France local & EU citizen pay the same.
Spain had been used to milking the foreignors . The EU funds or simple people like us who post on the forum.
The thousands of Olive trees that use to be feature of the Andalucian country now being used for solar panels. Guess where the money is coming from ?
I have a friend of mine from Seville, his whole business model is based on getting grants from EU.
Yes the focus should be on issues like these. Or more generally Spain’s “make it up as you go along” attitude to taxation and rule of law in general. I just happen to think the imputed tax is a bad example – the law regarding that seems pretty fair to me (as it stands).
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@shakeel wrote:
@Garry: Spain maybe going through its problems but let us not forget that.
a) Tax was there before the current state of Spanish economy.
b) The country should have had the wisdom to see that nothing is for ever and one day money from foreignors buying will stop or decline when the market reached a saturation point.
c) It has been collecting taxes from illegal builds knowing or should have been knowing the legal status of those buildings in questions.
d) People who were the conduits to ( c) above have not been punished to show the gravity of their crimes.
e) Until recently non resident paid a higher capital gains tax ( thanks to people like Arthur that this had changed) In France local & EU citizen pay the same.
Spain had been used to milking the foreignors . The EU funds or simple people like us who post on the forum.
The thousands of Olive trees that use to be feature of the Andalucian country now being used for solar panels. Guess where the money is coming from ?
I have a friend of mine from Seville, his whole business model is based on getting grants from EU.
Not to be disrespectful to Spain, but why would you think that Spain would “have had the wisdom” to do anything correctly?
Everyone I know who is lives in another country as a foreigner gets fleeced. It is right? No, but I’m not looking for it to get better ANYWHERE, anytime soon.
And there still are hundreds of thousands of olive trees in Andalucia.
If the EU is not getting a good deal from Spain, they should do something about it.
But foreigners who moved to Spain, fueled the bubble and pushed-up the real estate prices so much that locals could not afford them, are not going to get much sympathy from those locals. I know that many of the foreigners too were victims, but its not quite the same.
How soon we forget that very few Spaniards got rich from the real estate bubble. For most Spaniards, it was a crisis in that their adult children could not afford to buy a place because salaries did not rise with the bubble.
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@Arthur wrote:
Wasn’t the American War of Independence fought on the principle of no taxation without representation?
If the UK is working to conquer Spain and then convert it into a colony of the UK, and UK ‘citizens’ residing in Spain have no representation in the UK, then your question – and the obvious comparison – is apt.
Otherwise, it makes no sense to me at all.
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