Buyers Guide

Page 7

Patrimonia: All non residents have to pay wealth tax Patrimonia based on the amount on the Escritura Publica or the Valor Catastral, which ever is the highest value. Roughly speaking This tax starts at 0.2% on the first 156,263 euro, 0.30% for the amount from 156,263 euro to 324,547 euro and so on to a maximum of 2.5%. On a property of 150,253 euro a non resident would pay a tax of 300 euros. A resident pays nothing on the first 102,172 euros. A husband and wife when resident and jointly owning a property have a combined allowance of 204,344 euros. So they would pay nothing in Patrimonia tax on a house with a value of up to 204,344 euros, It really is only a wealth tax.

Non residents property owners tax: Only non residents have to pay property owners income tax. They are taxed at 25% of the income from your property whether or not you have a real income. The income is assessed as 1.1% - 2% of the Valor Catastral. The government have an ongoing policy throughout Spain of increasing Catastral values into line with real market values, the percentage applied to the new values is reduced to 1.1%.
This tax is in realty very low, especially if you purchase for rental income.
Owners should of course declare all the money they earn from rental income, and from 2002 there are new allowances to encourage owners to rent their properties.

Residents pay income tax: Residents pay only income tax on their declared income starting at 20% there are the usual tax allowances, and new ones to encourage owners to rent property.

Urbanizacion and Community fees: Properties on an Urbanizacion or in a Community will have to pay quarterly [or monthly] community fees, covering the running and maintenance costs of shared facilities which can include as private roads, drains, lighting, private water supplies, gardens, swimming pools etc. These costs vary considerably depending on the facilities available. The agent will advise you of the Community fees applying to a particular property.
If you are not resident in Spain, you are legally required to have a fiscal representative who is, an Asesor fiscal will take care of everything and keep you 100% legal for a small monthly fee.

Other things you should consider before you shop!:
NIE number: You will need an NIE Number [fiscal identity number] Its handy to have one even if you are not a property owner. A number can easily be obtained from the relevant police station but can take a few weeks to process, your abogado will apply for this for you.

Banks: Choose your Bank carefully, the running costs and fees do vary considerably, Most Spanish banks and Cajas [Similar to UK savings banks] are very good, and are very competitive on mortgages, some have excellent online banking in English.
All the utilities can be paid by direct debit from your account.
My Spanish bank offers free transactions, online banking, no maintenance costs and pays interest on the current a/c as long as I maintain a small minimum balance, they have never missed a standing order or payment, which is more than can be said for some!

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