Originally Posted by czukes
This is my first post here, and I would be grateful for any advice as i am thinking of buying a property in Barcelona to live there for less than 183 days a year over the winter, ie non-resident and paying tax and social/health costs in another EU country. I hope that someone can clarify the situation about Spanish taxes and health charges for non-residents, as there is conflicting information on sites i have visited. Apologies for any duplication.
1. Is it better to buy a property through a company. Could this be done via a company formed in Spain or a company based in another EU country? I have heard that buying property via a company has advantages but cannot find much information about this. What are the draw backs?
2. If setting up a branch of a company in Spain based in another EU country, I understand that only spanish company income would be taxed, not total income. At what rate?
3. if working for this branch of a company as a director or employee for less than 183 days a year in spain, what would be the liability for personal tax?
4. If buying a property personally, not via a company, based on a figure of 220,000 euros, what would be the
a. Valor catastral. I understand this is between 20-65% of the real value of the purchase price. How is this determined?
b. IBI. I understand this can vary between 0.5% to 1% of a. Again, how would this be determined?
c. Property Owners Imputed Income Tax. I understand this is up to 2% of the Valor Catastral per annum, charged at 24 or 25%, even if the property is not rented out. Are there tax breaks as well?
d. Wealth Tax. I understand this has been abolished from jan 2008.
Capital Gains Tax. The 3% withheld buy the seller and paid to the government on the buyer’s behalf (the gap between this an the 18% rate paid when reselling). Is this 3% therefore put on top of the price paid for a property? Can the 3% be avoided?
e. Inheritance Tax. Is there any information as to how this is determined? Again, there is wide variation in rates quoted.
5. How much would be the cost per month in owning a property of
b. garbage collection
6. Is there usually a charge per month for buildings upkeep or a sinking fund for reconstruction, and what on average would this be?
7. How much would an Asesor charge on average?
8. When buying a property, what are the costs
a.7% transfer tax? How paid?
b. 0.1-1% stamp duty on the sale price? For 220,000 euros?
c. land appreciation tax? What is this?
d. legal fees? How much for conveyancing?
e. licenses? for use of property when not there myself for rental to tourists.
9. What health/social charges are payable by non-residents if any?
At present i live in the Czech Republic, where there is no Council tax, personal tax is 15%, CGT is not payable on property after 2-5 years of ownership, Company tax is 19%, etc, all better than the UK or spain but it is too cold for me in the winter!!
I left Prague to live in Spain partly because of the awful winters but also because of poor quality of service and practically everything on sale and the appalling infrastructure which may in part be a result of its developing country-like low taxation regime.
High wage high tax countries such as Sweden, Norway, Denmark and even to a lesser extent Germany may be equally cold in winter and not very exciting to live in but they generally ienjoy a high standard of living.
Your questions are many and varied so your best recourse may be to go on line and purchase a suitable book unless some knowledgeable person like Steve has time to respond!
I would have thought however that setting up a company for the sole object of purchasing a property would be like cracking a nut with a sledgehammer.
Hundreds of thousands of people from other European countries, many of them wealthy, have purchased property in the 'usual' manner.