Spanish Tax Men Get Tough On British Homeowers
September 12, 2008
Owners of Spanish property could lose their homes if they fail to produce new identification documents proving their non-resident status, writes Ali Hussain of the Times Newspaper.
Britons who use their overseas accounts to pay for their Spanish mortgages and essentials such as utility services and council taxes, have been required by Spanish banks to produce a residence certificate or “Residencia” since March last year.
Failure to produce the new documents could result in bank accounts being frozen and mortgage repayments stopped.
However, some Spanish banks have failed to contact homeowners or given short notice to produce the papers.
One reader, Simon Wells, 52, from Walthamstow, East London, said that on August 15 he was told by his Spanish bank, Cajamar, to produce the documents by September 15.
“This is not easy to do as you have to register in person at a Spanish police station and then have it stamped by a town hall official. We were warned our account could be frozen.”
The requirement is part of an EU initiative to crack down on tax dodgers. Spanish residents are taxed at source, so to avoid paying tax there you have to prove non-residence status.
Britons — there are about 145,000 with bank accounts and properties in Spain, said broker Savills Private Finance — have to declare gains made in Spanish bank accounts to the UK taxman.
You qualify for non-resident status in Spain if you spend fewer than 180 days a year in the country and are able to produce the new document.
Anyone who bought a property before the new rules came into effect may be asked by their Spanish bank to produce the Residencia. Those who bought property after they were introduced will have been told of the requirement.
Residence certificates include your name, address, nationality, date of registration and the “Numero de Identificacion de Extranjeros”, a tax number for foreigners in Spain.
The Spanish Tourism Office said: “If you have a Spanish property, and have not been asked to produce this document, I suggest you contact your bank directly.”
Homeowners can contact the Spanish Ministry of the Interior’s immigration directorate helpline for more advice on 00 34 913 639 071.
To apply for the non-residency certificate you usually need to go in person to the Oficina de Extranjeros or police station in your province of residence.
The document costs about €10-€13, although if you go through a lawyer you may have to pay more than €120 (Approx. £97.20).
Find the nearest Oficina de Extranjeros at mir.es/SGACAVT/extranje/directorio.html
Article courtesy – Times Online.
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7 Responses to “Spanish Tax Men Get Tough On British Homeowers”
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Is this the piece of paper obtained from the local police with your NIE number on it when first purchasing a house?
What income tax will I pay on my OA Pension in Spain?
Don,t Spain want Foreign input (money) spent in Spain, seems they do all they can to discourage the purchase of property,also can Spanish authorities do the same as in U.K, print Spanish forms in English etc, that would help us all by saving Lawyers fees every time we need an official document processed, which is always around 100 euros a form, for about 3 minutes work, scandolous!!!
We bought our villa in Lanzarote four years ago and at the time we registered for wealth tax. We understand it has now been abolished but the person we appointed to see to our returns now tells us that we are liable for tax for the weeks we use it ourselves.
Surely that can’t be right. We don’t let the place and we pay all our rates, basura, water, electricity etc. What more do they want.
If anyone can advise on this I would be grateful.
Can anyone tell me what taxes I now have to pay on my spanish property, other than the usual ‘local rates etc’ now that Wealth Tax has been abolished. I paid the tax in Dec 08 – do I have to make any further returns now? would welcome advice.
Help! We purchased our apartment in 2004/2005. We employed an independent lawyer who advised us at the time that we no longer required a NIE number. Was this information correct?
We have paid a solicitor over the past years to pay our wealth taxes. Now that that tax has been abolished, is there going to be some other kind of tax to replace it, hopefully not.