Spain 2023-07-13T17:22:53+00:00

Purchasing a spanish property

IF A VALUABLE PROPERTY IS BEING BOUGHT THEN TAX PLANNING ADVICE IS ESSENTIAL

Spain is undoubtedly the number one choice for Brits buying abroad and in most cases, it is preferable to simply purchase a property directly in an individual’s name or names, if being bought by a couple. However, where potential purchasers are wealthy and/or purchasing a more valuable property it is essential to first get tax planning advice from a firm such as SCF. The reasons are multiple but in simple terms Spain, subject to international tax treaties, taxes individuals and companies on their worldwide income; has quite different inheritance tax provisions not to mention a wealth tax. It should also be noted that over the years Spain’s Hacienda (Tax Authority) has become far more sophisticated and the mere insertion of an offshore/tax free company will no longer produce the desired result of separating an individual or individuals from personal tax consequences or avoid potentially negative CGT/Inheritance taxes for themselves and their families. However, notwithstanding the complexities it is more often the case than not that tax efficiency and asset protection can be secured even for those intending to make Spain their primary fiscal residence.

PROPERTY TAX RATES – BUYING & SELLING

When purchasing a property in Spain the overall tax burden will involve a number of different taxes and be affected by whom or what is selling the property (i.e. a construction company or an individual simply reselling their property), whether the property is a new build or not and its geographical location. As a general guide between 8-11.5% should be set aside with respect to any purchase or potentially more if a purchase also needs an overhead corporate structure. When selling a property the main taxes are capital gains and plusvalia with the former being charged between 19-24% and the later basically being a variable local Town Hall sales tax. Where a property is being sold by way of a share transfer in a holding company the tax rates and tax implications will be quite different and potentially advantageous for wealthier individuals.

INCOME TAX LEVELS 2023

Spain taxes resident individuals on their worldwide income with rates progressively varying from 19% to 47% with the thresholds being:

  • Up to €12,450.00 = 19%
  • €12,451.00 – €20,200.00 = 24%
  • €12,451.00 – €35,200.00  = 30%
  • €35,201.00 – €60,000.00  = 37%
  • €60,001.00 – €300,000.00  = 45%
  • €300,001.00 and above  = 47%

WEALTH TAX LEVELS 2023

The Spanish Wealth Tax or Impuesto de Patrimonio is an annual tax payable by both residents and, in many instances, also by non-residents.  The tax is based upon the net value of ones assets as of the 31st of December but is not universally enforced with both Madrid and Andalucia currently being exempted. The tax is progressive with the thresholds being:

  • from €3,000,000.00 to €5,000,000.00 = 1.7%
  • from €5,000,001.00 to €10,000,000.00 = 2.1%
  • over €10,001,000.00 = 3.5%

PRIORITY ENQUIRY FORM

(Strictly Confidential No Obligation)

    SCF Legal & Corporate Management Services Limited

    Address: 250 Kings Road, Chelsea, London SW3 5UE

    Telephone: 020 7731 2020   Email: enquiries@scfgroup.com

    Registration number: 05462416

    © SCF INTERNATIONAL 2023

    A FULL RANGE OF LEGAL, ACCOUNTANCY & COMPANY MANAGEMENT SERVICES

    The SCF International  specializes in providing accountancy and management services for UK and Irish limited companies, UK & Irish company management services including the provision of (where necessary) domestic directors, domestic company secretaries, registered office address services, trading offices, value added tax (VAT) registration and management, payroll (Pay as You Earn PAYE), opening up and managing UK or Irish bank account facilities, raising  invoices and any and/or all other services required to establish a bone fide managed and controlled UK or Irish limited liability company.

    Our in-house team of legally and accountancy qualified experts can also provide advice on current UK & Irish tax laws/provisions including anti-avoidance provisions, EU directives and regulations, the impact of BREXIT for both UK and EU based businesses and other relevant. In addition, where required the SCF Group can also set-up and arrange the management of companies in tax efficient EU based jurisdictions such as Cyprus, Luxembourg or Malta or indeed any jurisdiction in the world including those in the Middle and Far East.

    Property de-enveloping services – In conjunction with leading UK firms of solicitors SCF can help transfer companies currently held by what were known as ‘offshore’ companies into either more tax efficient UK companies or directly back into the names of individual beneficial owners’ often without attracting stamp duty land tax (SDLT) but still avoiding the advance tax on enveloped dwellings (ATED).

    Our fiscal migration and tax planning department is operated by qualified lawyers and accountants and can advise both domiciled and non-domiciled individuals on how to mitigate their individual and corporate tax exposure be it in the UK or abroad. Our legal & business department can provide specialized advice on all domestic and international tax planning issues but also upon ‘key’ issues such as asset protection be it in the form of trusts and private interest foundations (PIF’s). In particular, SCF can provide advice to those intending to relocate to the UK on how to do so in the most tax efficient way.

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