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Buying your holiday home in Spain

Akilar.com has put together basic advice through legal advisers to help in buying your new holiday home in Spain. Information from the initial purchase to taxation's, National Identity numbers to medical cards, you will find the basics of what you will need to discuss with your legal representative in Spain.

Legalities in purchasing your new home

When purchasing your new home, it is most important to consult reputable solicitors and financial adviser's to assist with your purchase. It is best to find a professional who understands the tax laws in not only Spain but your home country as well. Do not take anything for granted when buying your home, ask questions if you are not sure.

The following information will give you a guide as to procedures which may apply in your purchase. Akilar CB stresses the following is only for guidance and can take no responsibility for your choice on legal matters. We suggest that you always source a reputable solicitor when entering into any transaction

Conveyancing:

When looking for a solicitor or conveyancer for your purchase, make sure that they perform the following as no two properties are the same:

  1. They should apply for a property registry report or "nota simple" which will inform you that the seller is actually the owner in full of the property and also if there are any outstanding charges or debts on the property.
  2. They should check with the town hall regarding the status of the land the property was built on and the urban classification.
  3. If the property is in an urbanization, they should check with the administration for the community to see if there are any debts outstanding.

Spanish taxes for residents & non residents

Tax in Spain is unlike that of the UK as it runs from January 1 to December 31but can still be confusing. Below are basic taxes levied by the Spanish government. This is for informative purposes only and each individual should consult with a tax expert for their personal situations.

Personal Income Tax

Personal Income tax is the same as anywhere, a direct tax levied on your personal income. This is very simple, compared to other countries, as it is your income less deductible expenses according to Spanish law and the balance is your tax base.

Wealth tax

This tax has been abolished as of 1, January 2008

Inheritance and Gift tax

Both taxes are of the same under Spanish law and is tax payable on an increase in your wealth by either a gift or inheritance.

Property Transfer and Stamp Duty Tax

Any corporate transaction or property transfer is subject to a tax which is known as "Stamp Duty"

Capital gains tax

This is a tax for wealth gains on a property in Spain should you sell it. It is calculated on the difference between your purchased price and the sells price as notated in your property deeds. At present the calculated amount is 18 % for non-residents. At the time of sale, a 3 % withholding amount of the sales price is retained against any taxes due. You will need to use the official figures of increased property value by the Spanish government to calculate your capital gains tax.

Corporate tax

This is a tax payable by limited companies ( S.L. In Spain ) on their profit during the fixed taxation period of the calendar year or that of which they set up in the beginning of the company

Value added tax in Spain

Value Added Tax or IVA, as it is known in Spain, is a consumption tax paid on all goods and services. The final consumer will ultimately pay this as it is law in Spain and is a percentage of the sales prices.

Real Estate Tax

Whether your property is in an urban area or rustic area, you will pay a tax on the property levied annually by the area where the property is registered

Tax identification number

Any individual who may be liable to pay taxes or dealing with the tax authorities are given a Tax Identification Number

Documents:

Residence Permits

If you are an EU citizen and have a job or are self-employed in Spain, you are not required to get a residencia card as the rules on this have change recently. This does not apply though if you are form outside of the EU or a retired person and will be living in Spain for more than six months. It is advisable though for all people to get one as it makes bureaucratic processes much easier and is required in some cases. You will need an NIE number (numero de identificacion de extranjeros) in any case in order to open a bank account, get a job or apply for your residency permit. Forms for both are available at the local Comisaria, or police station or there are service companies which will help in your application

For residency you will need:

Proof of income such as job contract, pension details or a savings account large enough to support you with the amount varying from location to location

Proof of private medical insurance or registration with the social security department.

Your passport.

If you are married and one is dependent on the other you will need your marriage certificate. If your choice of setting up home is an inland area it would be best to check if a Spanish translation is required.

Medical Cards

If you are traveling from the UK then you should acquire an E111 from your local post office. If you have permanent residence in Spain then you can apply for an official Medical Card (Tarjeta de SS) from your local Social Security Office (INSS - Oficina del Instuto Nacional de Seguridad Social) in Spain. To obtain your medical card, you can go to the office at either the medical clinic or hospital. Spain boast of its medical doctors as that are some of the best in the EU. To apply for this you will need to produce your E111/E121 along with other documents such as passport and or residence card. You will need to contact the Spanish consulate in your home country if you are from outside of the EU and want to benefit from the public insurance schemeto find out which documents you will need.

NIE Numbers

All foreigners in Spain need an NIE number (numero de identificacion de extranjeros) in order to open a bank account, get a job or apply for your residency permit. Forms for both are available at the local Comisaria, or police station or there are service companies which will help in your application. The forms are fairly straightforward and you will have your NIE number within normally one week of applying.