In this article in collaboration with lawyer Michael Davies we explain the tax situation in which a fiscal resident qualifies for non-payment of capital gains tax:
The first thing is to be able to prove to the notary prior to sale (via your lawyer) is that you are a Spanish tax (fiscal) resident. It is important to differentiate between being a tax resident and having residencia. These are two entirely separate entities, as the residencia which is issued by the police and does not prove that you are a tax resident of Spain. If you only supply a residencia at the notary, they will consider you to be non-fiscal resident and charge you 3% of the sales price as a retention tax. This is time consuming and somewhat confusing to reclaim and can take anywhere between 6-18 months to reclaim.
In order to prove your fiscal residency your lawyer will contact the tax authorities and request a document, which confirms your fiscal residency. This document can then be used at the notary and you will not be charged retention tax. The tax office in Spain will only issue this document if you have been declaring your taxes in Spain each year. Even if your income is too low to pay taxes, you still need to declare this to somebody. Remember if you live in Spain for 183 days or more you should declare taxes in Spain.
It is advisable when meeting your lawyer prior to even selling your property to be aware of the tax implications, as this will have a bearing on the costs of selling your property.
There is an exception where a total or partial exemption from capital gains tax is possible:
If you sell one property to purchase another of the same or higher then you can claim 100% exemption from capital gains tax. In order to benefit you need to have been a fiscal resident for the last 3 years and filed returns. If the property you are purchasing is lower in price you can claim an exemption percentage of the capital gains back.
If you are aged over 65 years of age and you sell you main home where you have lived for the last 3 years you can claim back 100% even if you do not reinvest. If one partner is 65+ and the other younger then you can claim the exemption in relation to half the price.
You will be surprised how many vendors we visit who are not aware of the tax implications of selling their property. Regardless of your income, you are still legally obliged to make a return each year.
This article is for information only and should you be concerned with your fiscal situation pertaining to the sale of the property, we strongly advise that you seek the assistance of a qualified lawyer or gestor.
Michael Davies can be contacted on firstname.lastname@example.org
At the start of 2107 we were not filled with optimism for the year ahead.
There were general elections in Germany, Holland and France. Political uncertainty in these countries was expected to have a detrimental impact on potential buyers and we already had certain clients delaying buying trips until after the outcome of the elections was known.
Then back in the UK a snap election was thrown. The UK market had been very nervous post Brexit and a general election would add to the confusion about the direction the UK was going and again potential buyers were "waiting to see" what was goint to happen.
With a cautious start to the year forecast, it was a surprise to all that January was such a great month
As it transpires all elections went the way they were generally forecast to go and there were no major upsets (USA excluded) and the uncertainty soon dissapeared and the buyers literally flooded back in....... and so it continued with villa sales remaining high throughout the year and even the traditionally quiet times for sales in August (everyone is on holiday) and November-December (thinking about Christmas) were far better than previous years.
2017 was a great year for Hondon Valley Homes and La Montanosa Villas with sales exceeding our record year of 2016 by 10% on gross volume but 15% on total number of purchases. We found that footfall was down by 15% (number of client viewings), however the clients that came obviously purchased.
We said goodbye to some great friends in 2017, but we welcomed many many happy buyers to the area to start their adventure in the sun.
So what does 2018 have in store.....
We have started the year off in fantastic fashion. A sale on the coast originally agreed prior to Christmas has been confirmed with deposits paid and contracts signed. Another sale in Urb. La Montanosa, in Hondon de las Nieves at the very end of the year has had contracts signed and depost paid this first week of the year and yesterday we agreed the sale of a stunning villa in Lel to German clients with one of our network of trusted collaborators. The year has started with a bang..... no slowly easing yourself back to work at HVH and LMV.
With no political issues (yet) that can effect the buyers confidence either in mainland Europe or the UK we are receiving many enquiries daily for a wide variety of properties.
We project that in 2018 the resale market will continue its long and sometimes slow recovery from the crash 10 years ago. The right properties in the right areas will continue to sell strongly. A well presented property in the right area with the correct documentation and well priced should expect a relatively quick sale in the Hondon Valley and surrounding areas. The exchange rate is showing tentative signs of recovery and 1€ = £1.20 is not as far off as it once looked.
The off plan market will continue to burgeon. We have developed excellent relationships with some of the finest builders, developers and architects in the area and there is a mini boom in off plan - self design properties in both country and Urb. locations. This we fully expect to grown at an exceptional rate in 2018 following huge success in 2017.
We are delighted to have been chosen to be the only agency to market an exciting new development od Hondon villas which we will be releasing very shortly.
As a company HVH has always been at the forefront of pushing the industry in terms of standards expected of us by our clients both vendors and buyers. This we will continue in 2018. We were the first to really raise the game regarding the photographic quality of our listings using professional photography equipment and the first to video properties for our clients. Now that some agents have caught up a little it is time to take the next step. Again we will have some amazing news over the next few months and take some huge steps forward in what we are able to do for our clients. These are changes that we started working on in the summer of 2017 and we will see the fruits of our labour soon.
At the end of 2017 a group of like minded agents and ourselves also launched the SAFE BUY SPAIN initiative. Disolutioned by some of the methods used by so called respectable agents and the proliferation of up-start agencies that have appeared, we decided to start the SBS. This will be a non-profit group where like minded agents with similar high professional standards, morals and ethics will be able to guarantee our clients top levels of service whichever SBS member they should choose to work with. To date we have obtained the backing of national banks, lawyers, finance institutions, architects and professional persons. Following a soft launch at Chrstmas 2017 we expect this group to become a powerful ally of purchasers and the agents as it develops.
So 2018..... the early signs look promising. One thing is for certain...... The sun will keep shining on this beautiful part of the world.
Over the festive period 2017-18 we will be open the following hours.
Until 21.12.2017 Open as normal 10:00-18:00h
Closed 22.12.17 until 02.01.2018
We wish all our clients past, present and future a wonderful Chrismas and a Happy New Year.
Everything you need to know about non-resident taxes in Spain
Making sure you are property tax compliant........All you need to know about non-resident property taxes in Spain
As the deadline for the non-resident tax declarations (December 31st) approaches, many non-residents with property in Spain have been coming to us with their questions. Here, we summarise the answers.
Am I a resident or a non-resident
If you live in Spain for more than 183 days a year then you are a resident here. Any less and you are a non-resident.
As a non-resident you must pay two non-resident property taxes.
What property taxes must I pay?
You must pay two taxes:
IBI (Impuesto Sobre Bienes Inmuebles) or council tax
Imputed income tax or rental tax (in some cases a combination of the two)
What is IBI?
IBI (Impuesto Sobre Bienes Inmuebles) is a council tax that must be paid by every home owner. IBI is:
Paid directly to the town hall or the SUMA offices
Collected at different times of the year according to the area
Based upon the rateable value of your property or valor catastral
When should rental tax be paid?
If you rent out your property then you will need to pay rental tax in Spain. This is collected quarterly:
Why do I have to pay income tax in Spain when I don’t live there?
The imputed income tax is payable by non-resident property owners who do not rent out their property and so do not pay rental income tax. The idea is that you could rent out your property if you wished.
Imputed income tax:
is paid on a second home that is not rented out
is declared in the non-resident annual tax declaration
is paid to the Spanish Tax Authority
Why haven’t I heard about imputed income tax before?
The system of collecting taxes is different to that in many other countries. For example:
you will not necessarily be reminded that you owe tax
it is your responsibility to make sure your tax is paid
overdue taxes must be settled before you sell or inherit
What happens on the 31st December?
The 31st December is the deadline every year by which time non-residents must have made their annual non-resident tax declaration. The non-resident tax declaration:
covers the previous year
is when your imputed income tax is calculated
is the means by which income of interest to Spain is declared
What happens if I don’t pay?
If you miss paying one or both your non-resident taxes then:
the debt is held against your property until it is either sold or bequeathed
you cannot change the names on the Title Deed until the debt is settled
you may have to pay late payment interest as well as sanctions
you might be caught out through one of the Spanish Tax Authority’s anti-tax fraud campaigns
your bank account can be embargoed leading to missed utility bill payments
How will they know?
The Spanish Tax Authority are increasingly cross-referencing information to identify where there are irregularities. This includes:
monitoring electricity consumption
comparing your details as logged on the Land Registry with utility usage
Won’t they warn me?
A letter may be sent to your Spanish address. If you are not there to receive it then:
the letter will be returned to the Spanish Tax Authority
a notification will be placed on the BOE (Boletín Official del Estado) - you are then considered to have been informed
if you do not respond to the notification your bank account might be embargoed
What should I do?
We recommend that non-residents have a fiscal representative. A fiscal representative will:
make sure your non-resident taxes are paid on time
represent you to the Spanish Tax Authority
be in a position to receive notifications
alert you to changes in the tax law
answer any queries you might have throughout the year
HONDON DE LAS NIEVES FIESTAS 2017
SATURDAY 22ND JULY 2017
2130 – Plaza de la Villa
Official Presentation of the Fondoneres Major y d'Honor Music by Union Musical de Hondon de las Nieves
SUNDAY 23RD JULY 2017
1000 – Calle Nueva
Classic car gathering then run to La Canalosa, la Montanosa and back to Calle Nueva for 1300
1400 – Industrial Estate Bajo Sombre
Giant Paella – Get tickets for food and drink (3 Euros) in advance. 1000 to 1200 in the pensioner's centre next door to town hall until Friday 21st or from 1600 onwards at Polideportivo until Thursday 20th.
MONDAY 31ST JULY 2017
1815 – Various streets.
Judging of the street decorations with traditional music.
2000 – Aula de Cultura
Opening of Photo Exhibition – 'El Fondó de les Neus – un Lloc per descobrir'
TUESDAY 1ST AUGUST 2017
2000 – La Fuente, Plaza de la Villa
Tribute to those missing or no longer with us.
2130 – Plaza de la Villa
Pregon de Fiestas- Opening fiesta speeches, fireworks and street decorations switch on.
2400 – Biblioteca
Parade with band to the Colegio. DJ appearing – tickets required - via Town Hall 0900 - 1100 until 26th July.
WEDNESDAY 2ND AUGUST 2018
1030 – Polideportivo
Aquatic Gymkhana and Free Swim for Children.
2130 – Plaza de la Villa
Sopar de Cabasset – Bring your own food and drink and enjoy the band 'Orquestra La Vendetta Project'. Tables must be booked in advance at Town Hall 0900 – 1100 until 26th July
2400 – DJ in Colegio
THURSDAY 3RD AUGUST 2017
0800 – Bell ringing and fireworks
1000 – Plaza de la Villa
Parade with traditional music, stiltwalkers and figures.
1900 – Biblioteca to Church
A floral parade offering tribute to la Virgen de las Nieves. Les Fondoneres and villagers in traditional dress, with traditional music and dancers.
2030 – Church Mass following parade.
2130 – Plaza de la Villa
Traditional dancing and music featurng the municipal group and the group Almadrava from Villajoyosa
FRIDAY 4TH AUGUST 2017
0800 – Bell ringing and fireworks
0930 – Plaza de la Villa
Parade with traditional music
1030 – Church Mass for the departed.
1830 – From Plaza de la Villa through the village's decorations Walk with the UMHN band, Fondeneres and Commisio de festes.
2100 – Plaza de la Villa
Performance by 'In Vivo Lyric Pop'. A tribute to Il Divo's Music.
2400 – Plaza de la Iglesia
Serenade by the Coral Amics Cantors d'Elx to honour La Virgen de las Nieves.
SATURDAY 5TH AUGUST 2017 – DAY OF LA VIRGIN DE LAS NIEVES
0800 – Bell ringing and fireworks
0900 AND 1000 – Church Mass
1100 – Various streets
Parade by the UMHN Band
1200 – Church
Special Village Mass with Dignatories, Fondoneres and Comissio de Festes
2100 – Various
Candlelit procession with La Virgen de la Nieves, Fondoneres, dignatories and music from the Ateneo Musical Maestro Gilabert of Aspe.
2400 – Plaza de la Villa
Open air dance with the 'Orquestra Royal Music' Band from Murcia
SUNDAY 6TH AUGUST 2017
1030 – Calle Vereda
Giant water slide for all ages. Bring a swimming ring to sit on!
2130 – Plaza de la Villa
Open air concert by the Union Musical de Hondon de las Nieves
MONDAY 7TH AUGUST 2017
0900 – From Plaza de la Villa
Cycle to La Canalosa for lunch then back to Hondon de las Nieves.
TUESDAY 8TH AUGUST 2017
1900 – Plaza de la Villa
Children's day with activities. Games, circus theatre and treasure hunt.
WEDNESDAY 9TH AUGUST 2017
1100 – Plaza de la Villa
Chess tournament – register at town hall beforehand.
1930 – No location given yet
Children's show – 'Jo mama' – by Regomello
THURSDAY 10TH AUGUST 2017
1730 – Polideportivo
Sports activities with games and inflatables for the children.
FRIDAY 11TH AUGUST 2017
1900 – Around Plaza de San Juan
Artisans Market opened by the Fondoneres.
2100 – Polideportivo
Sports gala to honour local sportsmen and women.
SATURDAY 12TH AUGUST 2017
1900 - Around Plaza de San Juan
1830 – Various roads in and around village XV Cross Urbano 'El Fondo de les Neus'. 10K Running race. Inscription (8 euros) at www.softimes.es Children's race at 1800, inscription 1 euro
2400 – From Calle Vereda to Plaza de la Villa Correfocs. Fireworks and music performance through the village streets.
FRIDAY 18TH AUGUST 2017
1800 – XVth Marcha a pie Hondon to Aspe
1900 – XXXII Edicion Bajada Hondon to Aspe
Organised walk and later run to Aspe
At last, we are freed from the shackles of slow 3g connection.
Yesterday the new 4G transmitter was operational and we can at last receive 4G
I did a quick speed test and obtained 41.42mbps download and 15.81mbps upload on the Movistar network.
In comparison, I normally get 28mbps download and 2mbps upload using my Movistar VDSL cable broadband.
Long gone are the days of 1mbps......
Unusually we have a selection of rental properties available for the Summer of 2017.
If you click on the link below you will see the up to date availability.
Normally all rentals are secured at the start of the year for the next 11 months, but this year we have two long term (11month) rentals and two shorter term (3 month) available.
Be quick or they will go...................
For example - Villa below ref HVH-NAJR. 700€ per month plus utilities on 11 month renewable contract.
We are very proud to announce the launch of our new website tailored exclusively for properties at La Montañosa in Hondon de las Nieves. There is such huge demand for this area that we have commissioned a website solely for this area.
The initail idea was to have a "no text" website, however this soon faded to a minimal text website in the style of Apple.
Icons replace a lot of the text, enabling non English speaking clients to have a better viewing experience. There are still translate options, however the feedback we have received so far has been very favourable. That is not to say there is not room for improvement, so if you have any suggestions, please feel free to let us know.
Click on the image below to see the new site: