Quote:
Originally Posted by woof
Hi Stravinsky,
thank you so much for helping with my question of searching websites with apartments for long term rental!
Astonishingly not all EU countries have dual taxation treaties with Spain, and those treaties closed do not cover all areas of taxation. Just look to not the smallest countries in the EU, Germany. They do not have such a dual taxation treaty at all.
You are definately wrong with the height of the IHT. First they get you as soon as you stay more than 183days/year in Spain and if they should get you withholding taxes they can fine you 20% extra tax. Anyway, read my lips - I pointed out that IHT can be " up to 80%". 
Let me demonstrate this with a realistic example: You receive an apartment from a friend by his last will in your home country, worth 400.000€. As result you have no tax exempt amount, which is not reasonable but ridiculously low 15.000€ in other cases thus this does not make a difference. In other countries the tax exempt amount with heirship can be 15 fold this amount. But back to the example. Above 398.777,54€ IHT rate is 29,75 % and the multiplier from tax class IV is 2,0 --> so you quickly end up with 60% heirship (§ 21 of the tax law).  Assuming one already owns an apartment or other values anywhere in the world, the tax rises even further, but most likely you anyway have no other option than selling the apartment for paying the taxes.
One must keep in mind that Spain was a socialistic country for decades. In contrast to other countries where heirship is ment to care for the recepient, Spain 's political intention is to take away this value from you and to redistribute it to society. 
If you know nothing about a 25% flat tax rate, than you do not know §9 of law 62/2003 dated Dec. 30 2003. It offers inward expats the option to choose between limited (but no allowances) and unlimited taxation. Yes, income tax starts with 15% but it goes up to 48%. Already from 80.000€/year you can save up to 5000€ taxes. |
Thanks for your input.
All I can tell you is that after years of researching the internet, getting advice from tax advisors, advice from a tax specialist gestoria here in Spain, speaking to Germans, French, English, Dutch Expats, and living here in Spain ....... what I posted above is correct according to all.
Please point me to details about a tax multiplier, as I know people here who's spouses have passed away and no such multiplier has been applied or mentioned and I'm eager to see what this is as even the tax books I have mention nothing of this.
If you inherit as a non spanish or spanish resident you cannot sell the apartment, as you suggest, to pay the tax. It is not allowed here in Spain to do so and you have to raise the funds to pay the IHT to release the apartment. A good option is to take out life insurance to cover this. A surviving spouse or child who continues to live in Spain after a bereavement can pay very little in IHT. Mortgages are deductable also, and if the apartment is in joint names then the liability can be reduced even further.
As far as I am aware there has been a tax treaty between Spain and Germany since 1968. There are around 70 treaties signed by Spain with other countries
For sure there is the 180 day rule, but if you are caught witholding taxes then, like any other country, you deserve to be fined!
So what you are saying seems to differ from what tax experts and people on the ground with experience say, but I'm certainly always willing to learn so look forward to seeing the details
