June 12, 2009 at 3:38 pm #55057
I have asked the European Commission to look at the question of non – resident property owners having to pay income tax on an imputed income from their property, even when it is not let. No resident, even those with 2nd homes, has to pay this. At least when it was called Schedule D in the UK it applied to eveybody. In effect, it is yet another example of discrimination against non-Spanish European citizens.
June 12, 2009 at 4:32 pm #92600
Totally agree with you. We had a similar situation with the rate of capital gains tax. Until a couple of year ago that it was brought into line with the residents.
That was a good time for the Spanish Government to harmonise the situation but the ethos of milking foreginors is a habit that they cant let go. Of Course this detrimental to inward investment in Spain.
June 15, 2009 at 10:03 am #92630
Arthur: Check this out
June 15, 2009 at 10:23 am #92631
“All these recent changes………are steps in the right direction and they will make Spain even more competitive as a destination for investment…”
“Home owners from abroad will see in Spain not only a modern European country…….”
Bernard Fay Viota, UHY Fay & Co
Not while Spain only does things the EU forces them to do, and in some cases eg. Land Grab, still gives two-fingers to their directives.
AND NOT WHILE THEIR JUDICIAL SYSTEM OFTEN IGNORES THEIR OWN LAWS AND DISHES OUT UNJUST RULINGS when purchasers have been sold illegal property.
Even Spain’s banks re. their Bank Guarantees act like third world crooks, hiring lawyers to enable them to ride roughshod over their obligations.
Peterhun on another thread today:
“Thats the whole issue that the EU has with Spain, its legal system allows all the guilty parties to get off with any penalty, the person who suffers is the home buyer”.
Exactly. Even if the building is allowed to stand, it’s the homeowner who has to pay the fine for its illegality, or is left in illegal-limbo for years while the Spanish deliberate what to do.
Until a purchaser can enjoy legal protection from corruption by all those involved in the buying process (EA’s, lawyers, banks, Town Halls, judges, yes even some notaries), investing in Spain is a gamble.
Ask Mr. & Mrs. Prior reduced to living in their garage in Vera and those who have had their properties ‘confiscated’ at the whim of a local council to facilitate new roads etc – plus countless thousands of others including many members on this forum.
“A modern European country?”
In my opinion Spain is still a third world country and there’s a long way to go I’m afraid, Mr. Viota. It will take more than tinkering with the tax system to restore confidence.
Would love to know your thoughts, perhpas I’ll send you an e-mail to invite you to comment?!
June 15, 2009 at 3:30 pm #92635
Many of us non-residents are paying income tax on “non-income”. How just is that? Spain seems to be content to take the benefits of the EC without having any concept of a level playing field.
June 15, 2009 at 5:04 pm #92637
Level playing field? 😯 Minefield more like!!
June 15, 2009 at 5:29 pm #92638
Arthur – Mr. Viota, who wrote the article via Shakeel’s link, is a Chartered Accountant. I have e-mailed him and invited him to comment.
It would be interesting to hear his opinion from a professional point of view.
June 15, 2009 at 7:11 pm #92639
Hi Charlie. Mr Vioto has covered the position comprehensively. I cant see what else can he say in reply to your email to him.
June 15, 2009 at 8:55 pm #92641
We’ve had years of people talking up the market in Spain, and all too easily making what I regard as broad statements that can give a false impression to those not so experienced with what goes on in Spain.
Whether it be adverts boasting of high potential rental incomes, phoney agents associations, developments promising all and sundry via glossy brochures when often hardly any of the amenties are ever built (promised number of swimming pools etc.), right through to articles where self-interest could be construed as the reasoning behind the content
I believe comments such as the ones I quoted from Mr. Viota’s article follow the same pattern and hold no water at this stage. Spain does not have their house in order by any stretch of the imagination, and in my view it’s wrong to intimate that Spain is a destination for investment while there are many thousands of people who did just that – invest (whether it be for ‘lifestyle’ or strictly investment reasons) – but have now found themselves badly out of pocket, their money tied up in propety that has illegal status, often unable to get a mortgage because there is no LFO, thousands caught up in lengthy court cases and then being served crooked justice.
When you personally know of and are in touch with people who are being made ill by the stress of being caught up in all this mess, and I am in contact with many who are, articles like this, for me, paint a false picture. Yes, this latest development re. the tax law is an improvement re. a situation that shouldn’t have existed in the first place but it is a pitiful contribution to putting Spain on the map as a place for investment and absolutely meaningless to people who have lost their life-savings.
I stand by what I say that Spain has a long way to go before it can be regarded as a ‘modern European country’ in the true sense of the meaning i.e. in the way it operates. All the time nepotism, cronyism, and boys-club mentality cotinues to exist such as the Colegio de Abogados where you can’t even obtain a response when making a complaint, or if you are lucky to get a response it is the standard “in our view this lawyer has not broken any rules”, we will continue to trot out the cry “Welcome to Spain” (your comment to bentdavi on Monday) and raise our eyebrows skyward everytime things go wrong.
Chris McCarthy contributed a lot to SPI when we queried Viva’s new commission structure a couple of years ago, and he continues to make great contributions generally on all subjects.
I made a post showing an opposing point of view to Mr. Viota’s comments and am only giving him the courtesy of the opportunity to respond on SPI. As Mr. Viota is a professional operating in Spain, I am interested to know if he thinks this development re. the tax law will make any serious difference to confidence in investing in Spain and to possibly respond to Arthur’s comments – purely from the angle of debate.
And if he would be happy to contribute any advice on future tax issues that come up from time to time on SPI, I’m sure that would be more than welcome by SPI members.
June 15, 2009 at 9:46 pm #92643
I, suppose you knew that you were preaching to a convert. Spain cannot be a Country for investors & certainly not in our life time.
I, personally do not consider a person buying a place for themselves as an investor in a bigger scheme of things. A bigger investor whose funds can make a difference will prepare an in depth due diligence and will walk away. As they are hard nose investors who do not get swayed with the sunshine or a glass of Rioja.
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