Tax and legal ownership

[Anonymous]

How are the local property taxes and wealth taxes for non residents treated when a property is owned equally by 4 persons. Does each person have to make a tax return, and is the value of the property divided by 4 as well?

[Anonymous]

If you’re talking about fractional ownership, I think the property is owned by a limited company and you have shares in that company.

Not to be recommended, really as it’s a new idea here and I’m unsure as to how the law will view the situation.

[Anonymous]

Fractional ownership is also possible without having to buy through a company. In fact it’s more common – i.e. when a husband and wife each own 50%.

The local rates (IBI) will be charged to one person. You should then settle up privately. For wealth tax and income tax you need to submit individual returns, and yes, the value is divided in proportion to your part, i.e. 25% if 4 equal parts. However best you check the detail with a Spanish tax advisor.

Mark

[Anonymous]

The advise given by Mark is absolutely right, the non residents Wealth and Income Tax is declared by each owner and the value is divided according with the share of each one.

The pro indiviso is a quite common figure and allows not only relatives but also a group of people to buy and hold a property without having to form a company.

Regards,

Jose Maria Sánchez Alfonso
Lawyer / Abogado
Costa del Sol
jmsalfonso@inicia.es

[Anonymous]

Thanks to all who replied. I will be going down the route of a purchase based on 4 family members. I understand that the wealth and income tax are assessed for each non resident owner, but I was concerned about the tax base being fixed on the whole value of the property in each case for the wealth tax, and non resident income tax being based on the same value.

[Author]

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