taxes (ugh) and property value

[Lizzy]

as a new house owner (only just) can I have some guidance on taxes to pay. I will be non-resident and will have no income in spain other than odds and sods of rental.

when are taxes due?
where are they paid?
how soon after deed signing (only last month) should I start thinking about this.

as regards property value, appreciating that purchase price doesn't come into this - I know taxes are applied to valor catastral and authorised valuation. what is the difference and where do these come from. what is the official name for the value which is in my deeds.

what is the property tax rate for los altos - or does it depend.

help appreciated.

liz

[AndyH]

Hi Lizzy,

Take a look at this link, it tells you all about SUMA, in English.
Basically, property tax IBI is paid on the cadastral value of your house. This is the value that was put in your deeds and probably won't bear much resemblance to the amount you paid for the house. It is usual to put about 70% of what you paid on the deeds as the cadastral value. Much has been said about this in previous posts, but I won't go into that now.
IBI is an annual tax to be paid if you own property, a garage, or a plot of land. It is due on the 1st of January, but I think there is a voluntary period in October or November of the previous year when they will accept payment. Suma usually advertises this period in the British press, Costa Blanca News etc.
It is calculated as 0.65% of one third of the cadastral value.
There is an example to follow on the link.
Also at the top of the page, there is a dropdown that lists all the local SUMA offices.
If you want to be sure that it is being paid properly and on time, employ a Gestor to do it for you. These are like a cross between accountants and lawyers and basically spend their time form filling and chasing paper for their clients.

http://www.suma.es/nuevo/Ingles/default.htm

Hope this helps.

[Doc]

Lizzy,

For your information and peace of mind, I bought a resale in January 2004 and have been assured that I am not due to pay any taxes until later this year, so you have a while to get things sorted.


IBI.
The real estate tax or "Impuesto sobre Bienes Inmuebles" or "IBI" for short is an annual tax related to the valor catastral of your property. It varies widely with location but in rural properties well away from the coast it can be as low as 60 Euros a year. IBI is due in January for the previous calendar year, but you are only liable to pay this if you have owned the property for the full calendar year, therefore this will not need to be paid by you until January 2007.


Wealth tax.
An annual tax payable on the "real sale value", (always higher than the valor catastral) is payable on your property. This wealth tax is know as the "impuesto extraordinario sobre el patrimonio" or simply "patrimonio" tax. Residents and non-residents are treated differently.

Non-residents pay 0.002% of their assets in Spain as wealth tax, which is divisible for joint owners. For example a husband and wife owning a property with a sales value of 100,000 Euros would each pay 100 Euros annually as wealth tax.


Renta.
The Spanish tax authorities make the assumption that if you are a non-resident and own a property in Spain you will derive an income from it. The annual income is calculated by taking the official property value "valor catastral" and multiplying it by 2%. If the property is jointly owned the valor catastral is divided by the number of owners, normally two. If you are a non-resident the tax payable is calculated by multiplying the income by 25%.


If you are non-resident and the owner of more than one property in Spain you must appoint a tax or fiscal representative, if you only have one property you are not legally required to do so.

A fiscal representative can be any resident of Spain, whether Spanish or otherwise, usually he or she has expertise in financial affairs and can be a tax consultant, lawyer or "gestor" - a person qualified in administrative procedures.


HTH,

Chris.

[Lizzy]

taxes

thanks for all that information.

I presume IBI is paid at the local town hall and te other taxes are paid to the tax man?

What is the process for them knowing I am here? (not that I want to pay them!) ie who tells the town hall and tax office to bill me?

also what is SUMA? Can't get my head round where they fit in on tax collection. is there a UK equivalent?

liz

[Doc]

Hi Lizzy.

SUMA is like an Agency that undertakes to bill and collect various taxes (including IBI, car tax, rubbish collection tax etc) on behalf of the authorities. In Orihuela Costa they have an office in the Ayuntamiento at Playa Flamenca.

I presume that you have an NIE number, which will be registered to you at your address. That is how they know who you are and where you are. Also, the taxes payable are mainly connected to property, and I would assume therefore that if unpaid will remain as an outstanding debt against the property until they are either paid or the property sold.

HTH,

Chris.

Don't forget you also have to pay tax on your rental income - to the UK tax authorities!!

[Allen]

As I understand it, the property tax is exactly that. Any rental income you receive is classed as unearned income by the UK authorities and taxed accordingly. Anyone know different?

[janzon]

Doc you are right

If you bought your resale in January 2004 you shouldn't pay SUMA until the August 2005 bill arrives.
The person registered as owner on January 1ST of each year is responsible for that years suma bill.

[Doc]

Allen,

The Renta (assumed rental tax) is based on the Cadastral value of the property not the purchase price. The Cadastral value is normally a lot lower than what you actually paid.

Chris.

[iola]

the way double taxation works is as follows: If you are resident in the UK you are liable for tax on your worldwide income. however the Revenue will take into account tax paid in spain. you would need to register for self assesment, complete a tax return in the UK. on the foreign income page you detail the taxable income from the property and the foreign tax paid. For this you will receive a tax credit that will ensure you are not taxed twice on the same income.

Clear?! your UK tax office will help if you're unsure.

[Doc]

Re my last post (17th March) - I'm trying to find out at present (with the enormous help of another poster on the forum) whether the Renta is based on the Cadastral or Escritura value. My understanding is that it should be on the Cadastral value. I'm also trying to discover whether any outstanding mortgage can be deducted from the base value before the Renta is then finally calculated (as it can be with Wealth Tax).

I'll keep you all posted.

Chris.

[Buckets]

Taxes

Last week I visited my place in Torrevieja and found in my postbox notification that the Correos had tried to deliver 'Catastro' a couple of months ago and that I could pick it up within 7 days at the Correos. I expect this to be tax info/bill. As the 7 days are up I was unable to get it. There was no other address on it or info on what I should do now.

Does this have to be signed for?

I pay patrimonio by direct debit and haven't yet been billed for Suma. Does anyone know what I should do now? I am back in the UK.

[Jane C]

[Jane C]