Bit of a mess with Wealth Tax

[harry]

Bought our property about 4 years ago & have not paid this tax at all in this time. People keep telling me we'll get a Suma but I've never seen one for this tax.

We're coming over in June & think it's about time we cleared this up but a bit unsure where to start?

Where do I go? do I need a abogado? do I need to take things like copy of deeds etc...?

Absolutely no idea what to do! found this site
"http://www.suma.es/nuevo/Ingles/default.htm" but all pages relating to IBI etc.. have "Pages temporarily out of service"

Many thanks for any help!

harry

[Doc]

Hi Harry.

As a non-resident I believe you are liable for three different taxes (or four if you rent your property commercially).

IBI (or Real State Tax) is the first tax and is a bit like the Council Tax in the UK. I bought a resale in January last year on an Urb that is two and a half years old. When I asked the other residents of the Urb about the Suma bills (for IBI) I was told that the Urb had not yet been assessed for valor catastral, and as such there was nothing payable until they'd agreed the value. The bills would start when they had done this, and would not be backdated. (This may or may not be accurate - I haven't quite got to the bottom of it yet). You only have to pay IBI for the calendar year if you owned the property on 31st December of the previous calendar year. The amount payable is calculated by multiplying your valor catastral by a tax rate decided by the local authorities each year. You should receive a bill for this tax.

Wealth tax is the second tax. It is an annual tax payable on the "real sale value", (always higher than the valor catastral) payable on your property. This wealth tax is know as the "impuesto extraordinario sobre el patrimonio" or simply "patrimonio" tax. Residents and non-residents are treated differently. Non-residents pay 0.002% of their assets in Spain as wealth tax, which again is divisible for joint owners. For example a husband and wife owning a property with a sales value of 100,000 Euros would each pay 100 Euros annually as wealth tax. The tax should be declared each year for the previous calendar year (i.e. this year you would make a declaration for calendar year 2004). If you have a mortgage on the property, the 'real sale value' is reduced by the amount of the outstanding mortgage, and tax paid on the balance. If the property has more than one name on the deeds, each named person must submit an individual return.

The third tax is Renta (which is tax on the assumed rental income you receive from your property, regardless of whether you receive any rental income - if you do, you must also declare that income as income tax which is the fourth tax). Renta is calculated by multiplying your valor catastral first by 2%, and then the tax payable is 25% of that figure. If there is more than one name on the deeds the payable figure should be divided equally between each name.

I think that's it, but I stand to be corrected. I've seen the Modelo 214, and personally I'm going to get a Gestor to do the lot for me - far safer.

So, if you find a good one, or if anyone else knows of a good one, please post. I know that the name Westmed Consulting keeps cropping up, but haven't investigated this one fully yet!

Good luck, and let me know how you get on, because I'm only a few steps behind you!

Chris.

[la torreta]

We have used Scandinavian Management, S.L. since May 1997 as our fiscal representatives and find them extremely efficient. We use both the partners, Lilian Marjasin and Bjorn Sandersson. They both speak fluent English, Spanish, German and of course all the Scandinavian languages. We have recommended them to many British people and without exception, they have all been more than pleased with their professionalism.

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Telephone numbers 966702413 / 966702902. Fax 966706665.
email: lilian@scandtax.com