Articles

Capital Gains Tax liability in Spain

This note is important for people who sell a property in their home country when they have become a resident in Spain before selling the property.

Where you have owned a property for at least three years and it has been your habitual residence for that period, the property can be considered to be your habitual residence. Under certain circumstances, you will be exempt from Spanish Capital Gains Tax if you sell your habitual residence while you are a tax resident in Spain. This note is important for people who sell a property in their home country when they have become a resident in Spain before selling the property.

What to consider when retiring to Spain

For many retirees, Spain is a very desirable country to settle in. The warm weather, a relaxed way of life and a more affordable way of living make life on the Costas sound appealing. However, it is not all plain sailing. It is highly likely that, for those retiring to Spain, they will also purchase a Spanish home in conjunction with the move. In this instance, it is important that you engage an independent Spanish lawyer to advise you in relation to the transaction.

Before you make the move, there are a number of factors to consider. For those purchasing a Spanish home there will be costs to consider in relation to property ownership, as well as tax implications. In addition to this, the potential impact that Brexit may have is also cause for consideration. We will set out the issues mentioned above in this article.

The dos and donts of buying an off-plan property in Spain

One of the appeals of buying an off-plan property in Spain is the ability to buy a brand new property and to have a say in how the finished property will look. In conjunction with this is the certainty for buyers, pre-construction, that their new build will be modern, functional and structurally sound. Equally, developers can be certain that they will not be out of pocket.

There are, of course, similarities between buying an off-plan property in Spain and buying a resale property. However, there are also factors that are unique to off-plan properties. The process of off-plan property purchases differs in the first instance, but there have also long been risks involved for the purchaser as the property will not be built after they have already made payments towards the purchase price. Whilst there are now laws in place to protect buyers who opt for off-plan properties in Spain, which we discuss in a previous article, there will still be obstacles to overcome, like with any other property purchase.

Frequently asked questions about inheriting in Spain

As specialists in inheritance in Spain there are very few scenarios that we have not come across in relation to Spanish estates and inheriting assets in Spain. After over 18 years of working in the field we have become very familiar with the concerns of those who are inheriting assets in Spain and so we thought it would be helpful to put together a rundown of our most frequently asked questions when it comes to inheriting in Spain and the answers to those pressing questions.

Spanish inheritance and gift tax refunds

Those who follow Spanish legal developments will be aware that some time ago the Spanish authorities were deemed by the EU to be discriminating against EU residents by applying different rules in relation to inheritance tax for Spanish residents as opposed to residents of other EU member states. We wrote about it here.

The ruling led to a significant number of claims by EU nationals for refunds of inheritance tax paid in Spain in the four years prior to the ruling.

The wheels of justice in Spain turn slowly and a recent ruling of the Supreme Court has now held that the inheritance and gift tax system in Spain has discriminated again, this time against non EU and non EEA residents. We published a detailed analysis here, but what does it mean for you?

Living, working and owning property in Spain - The effect on Brits of Brexit

To quote the great Robert Burns, there is no such uncertainty as a sure thing. This sets the tone for a discussion of how things may change for Brits in respect of living, working and owning property in Spain after Brexit. We have covered the subject of Brexit in detail at various points since the referendum result in 2016 and for a long time "no change" was the mantra. Now that we are officially in the transition period, which comes to an end at the end of this year, we have reviewed what has changed and what has not, as well as what is likely to change for Brits when the transition period comes to an end.

Spanish inheritance tax and gift tax: a long and winding road

It is certainly the case that Spanish tax law is evolving to keep up with European law, but not without a struggle. We appear to have reached a level playing field, whereby the liability of everyone to Spanish inheritance tax and Spanish gift tax is applied equally, irrespective of the country of origin, or the country of residence of the person liable to the tax. However, this has taken some 22 years to achieve.

Brexit and Spanish assets: the succession picture

Fortunately, over the course of the past seven years the development of the succession and tax rules applicable to Spanish estates favours UK nationals, in both a leave and remain scenario, whether in respect of the UK remaining in the EU, or Scotland remaining in the UK. The administration of the Spanish elements of a Scots estate need not be complex, provided it is approached logically and methodically, like any other aspect of a death estate.

The first issue with which to grapple in the administration of a Spanish estate is the documentation that is required, including documents issued in Scotland and those prepared and issued in Spain. The next phase is to determine the succession law applicable to the estate and the liability of the beneficiaries to Spanish tax. We strive towards a timely realisation of the Spanish estate assets, although beware that it is an art rather than a science, and not for the fainthearted.

Death and taxes in Spain

Over the past 12 months, the Spanish government has made important changes reducing significantly the cost to consumers of borrowing money secured against Spanish property, and equally important changes to the amount of Spanish inheritance tax and gift tax to be paid in Spain, irrespective of one’s country of residence.

Buying property in Camposol, Spain

The Camposol development in Murcia, Spain, is an area known to have been plagued by difficulties during the build and in its early years. As the situation has improved and stabilised, British buyers have been tempted by the plentiful supply of property at reasonable prices and so we are seeing more buyers keen to purchase a place in Camposol.

As with any property purchase in Spain, early independent advice is the key to making a successful purchase. However, there are some issues peculiar to the Camposol development that it is important you are aware of before taking the plunge.