Living abroad tips and hints for money savers

Merrywidow

All right you lot - be quiet. Its cold and raining AGAIN today and I am very cheesed off. Started planning a few get-a-ways. Its 20oC in Amsterdam. Should be there today for my sister-in-laws birthday but I've mislaid my passport AGAIN. Our weather forecast has us down for snow on Wednesday. Hope we escape. Seriously - glad for you all, everyone will start to unfurl and come alive again much like our gardens. Watch out for frost Farmer Droopsnout, could get your pea shoots!

droopsnout

Hi, MW!

I don't think we'll be having any more frosts now, but hope to goodness I'm not tempting fate!

Oi think me peas be safe, but Oi'll 'ave to worry bout me onions liftin, oh arrhh, an' me lettuces.

Pesky snails an' magpies be ready to nick all me tenderest bits!

Can't believe your lost your passport AGAIN!!!

Just saw the weather forecast for you on Countryfile. Winter draws back on, missus!

gallygirl

seven-day-weekend wrote: »

Felix Semana Santa to you too.

We have swallows and hoopoes too, good to see them. Not so sure about the carpenter bees.....

Going out Weds & can't wait to see the wild flowers - and hopefully a lot of rejuvenation where the fires were - some was apparent in January. Hope to see some hoopoes too, they are soooo pretty. Temperature looks to drop to 'only' 18 but rumoured that big yellow ball in the sky I vaguely remember will be out all day :T. Can't wait to get my toes out!

Feliz Semana Santa to all

gfplux

We are in Tenerife at the moment. We are taking a week of warm sun while we can. South of France warm in the day but cold at night.
Diesel here about 94cents however other things are super value.
Some examples
Haircut €12 Luxembourg €26
Beer local €1 a pint L - €2 for 25cl
Simple lunch €6 or €7 L -€10
etc etc.
Is that the same on mainland Spain.
Lots of Hotels and business's not very busy here I hope it gets better for them later in the year.

seven-day-weekend

Lunch yes, 'Menu del Dia' can be had for as little as 5 euros, usually about 7-8.
(three courses).

Beer is 1 euro for a small glass, nowhere near a pint, but in some places (Andalucia is one of them ) you get free tapa, a little snack to go with it.

Haircut I would not know, I have long hair and my hairdresser charges me 8 euros for a dry cut, but she does not have a salon.

joshieg3011

I wonder if anyone can advise me on this, please? Three years ago, bought an apartment in Spain off an English couple for 90,000 euros (we do not live there, it is our holiday home). We paid tax on this at 7%.

Have just received an e-mail from my Spanish lawyer advising me that the Spanish government have valued the property at 122,000 euros (we declared 90,000, which is what we paid for it) and there is a shortfall in the amount of transmission tax of over 2,500 euros, which should be paid by 5th May otherwise they may take us to court. We can appeal but he advises we should just pay this. He has attached a letter from the local Generalitat.

We are worried sick - has anyone heard of this? If so, surely that means there are a lot of apartments in the development with the same issue?

Many thanks in advance for any advice/assistance anyone can provide.

donny-gal

We are non-residents also joshieg and do not understand what the charge is for.

Upon googling non-resident tax Spain I found this.
Deemed income tax
If the property has not been rented out during the year, then income tax on an "imaginary" rental income is due. In general this tax works out to be 0.48% (24% x 2%) of the rateable value (valor catastral) of the property.
If the rateable value has been revised since 1st Jan 1994 then there is a further reduction in the tax rate to 0.264% (24% * 1.1%).


Tax on actual rental income

If the property has been rented out, then tax is payable at 24% of the rental income received, with no deduction for expenditure. In this situation, tax returns are normally submitted on a quarterly basis.

I think you need to ask your solicitor to explain exactly the tax and ask for the bill from the Government, or maybe even talk to another solicitor?

If you are joint owners you each have your own tax with half the value of the home.

DG

joshieg3011

Hi Donny-Gal,

This is what the e-mail from my solicitor says:

"We have received today a letter from the Tax Agency ( find it attached ). Basically for your understanding, the Tax Department have assesed to your property a higher value (euros 122,944.92) than that which was declared ( euros 90,000 ) and thefore there is a shortfall in transmission tax of euros 2,689.50. Against this we may appeal, but there are some cost you should bear in order we may request a valuer to make an appraisal on the property. The deadline to pay to the Tax Department the amount due is May the 5th. If you do not pay this they will claim the debt by the Courts and will demand as well that you pay the cost arising from them, so i advice you to pay this. Obviously you may be confused since you declared everything you paid for the property but the goverment have allocated a higher value to the property and you are liable to pay this."

Basically they are saying that they have assessed our apartment to be 122,944.92 euros and there is a shortfall in the amount of tax we owe on this. Spanish tax is 7% when buying a property (a bit like our stamp duty). What I can't understand is why are we being charged this 3 years later? We paid 6,300 euros in tax at the time and they are now saying we owe them another 2,689.50 euros (they have also calculated interest owed on this at 400 euros).

I am worried about this and obviously can't speak to my solicitor/any solicitor until the morning but wondered if anyone knew anything about this meantime.

Many thanks

seven-day-weekend

I think what it is, is that you only paid purchase tax on 90,000 euros when you bought the house, the Government have now said it is worth 122,000 euros so want the rest of the tax.

People have under-declared on house prices for decades to keep taxes down - for example declaring £100k to the Government but actually paying £120k and giving the rest to the Vendor in cash (black money) to avoid the tax, and now the Government are beginning to come down heavy on it. I think that they think you have under-declared.


Welcome to Spain.

lislou

Been lurking for a little while, whilst thinking of buying.
Just found this. Taken from a Solicitor's newsletter. Hope it helps.

'TAX NEWS

The Spanish Inland Revenue 'penalises' anyone who buys a bargain-priced home
The tax authorities have minimum prices for residential properties.

When you buy a second hand home you have to pay a property transfer tax (PTT), established by the Autonomous Communities, which comprises 7% of the sale price which appears in the title deed. Although this is normally straightforward, there has been a recent increase in the number of cases where purchasers have received a tax demand from the tax authorities for an amount which is higher than the PTT they have already paid.

This is particularly true when a homebuyer has bought a home at a low price - a bargain price. The reason for this is because the Autonomous Communities have several minimum-price tables, which are used to calculate the minimum PTT that the purchaser has to pay when they buy a house. The purpose of these tables is to prevent the fraudulent practice of registering a purchase price in the title deed that is lower than the real sale price. As a result, the tax authorities have a reference minimum price for each residential property, and consequently a minimum tax amount. This is not a problem if the purchaser pays more than the minimum tax, but if the tax authorities think that the purchase price has been too low it uses the tables to claim outstanding tax.

An unpleasant surprise for the purchaser

Therefore, anyone who buys a second hand home, and is not familiar with all the procedures, may find themselves in the situation where, after having paid the taxman 7% of the property's purchase price, they receive a tax claim from the tax authorities informing them that they have to pay additional PTT. The amount in question will be 7% of the difference between the purchase price that appears in the title deed, and the price that the tax authorities consider to be the minimum price of the property, plus the interest due for late payment.

For example, if you buy a home for 200,000 euros, you hav e to pay 14,000 euros as PTT. If the minimum price of your property, according to the tables of the tax authorities, is 300,000 euros, the minimum PTT is 21,000 euros, which means that the taxman will send you a tax claim for the difference: 7,000 euros plus interest.

For this reason, if you are thinking about buying a property whose price, perhaps due to the crisis, has dropped significantly, you should find out its minimum price in the minimum-price tables in order to know how much tax you will have to pay, and to avoid any unpleasant surprises or tax claims at a later date. The minimum prices are usually below the sale price, but in some areas where home prices have plummeted as a result of the crisis, it is increasingly common for this not to be the case.

It is therefore extremely important that before executing the title deed for the property, you contact the tax department of the Autonomous Community where the property is located to find out what the min imum price of the property is, according to the tax authorities´ tables. This will enable you to find out how much tax you will have to pay, and allow you to plan your finances accordingly. In particular it will save you from being subject to unpleasant surprises in the future in the form of a tax claim from the tax authorities.

Is it possible to appeal to the tax authorities to avoid paying "extra" tax?


If the purchase price that appears in your title deed is less that the minimum price given by the tax authorities, and you pay less PTT than is due, the tax authorities will send you a tax claim informing you that you have to pay the difference. After you receive the notification, you will have a limited period in which to appeal, and present your arguments to justify why the property's purchase price is less than the price that is given in the minimum-price tables. Typical grounds for appeal are that the purchased property is in poor condition, or that it has a sitting tenant (which lowers its value). You can also provide a valuation report from an independent expert that shows that the market value of the property is less than the value assigned to it by the authorities. However, it is extremely unlikely that your appeal will be accepted, and that you will not have to pay "extra" tax, as this only happens when there are extremely strong grounds. Therefore you should not count on the appeal being accepted, as the tax authorities "accept" that you have purchased a bargain-priced home, but they will tax the sale using the property's minimum price in the event that the sale price is lower.'