As the year kicks off, new regulations in the Spanish budget for 2015, which directly affect owners of Spanish property and businesses, have come into effect. Peter Esders, commercial director of Judicare, the legal services company, assesses the impact on British owners.
“Property owners selling or gifting their property bought before 1994 will be required to pay more tax than previously as taper relief on capital gains tax from the disposal of a property has been abolished. However, you are exempt if you are over 65 years old and selling your main home or if you are under 65 and selling your main home to buy another main home in Spain.
“Income tax has also changed with the top band reducing from 52 per cent to 47 per cent and the lowest band reducing from 24.75 per cent to 20 per cent but with a reduction in the number of bands from 7 to 4. If you are a non-resident in Spain this only applies to income earned in Spain.
“The Wealth Tax (Impuesto Sobre Patrimonio) for those with assets in Spain valued at €700,000 has again been extended for a further year. This was first introduced in 1977 as a temporary tax but continued until 2008 when it was suspended only to be reintroduced in 2011 and extended each year.
“In an effort to boost the economy, company tax is reduced from 30 per cent to 28 per cent in 2015 and will be reduced further to 25 per cent in 2016. However, a new regulation abolishing rent control for commercial properties has been introduced. Businesses have previously been protected as, for the last 20 years, rents have only been allowed to increase in line with inflation but from January 2015 market forces will apply for all rent reviews (obviously subject to existing contract agreements and negotiations).
“Happily, IVA – the Spanish equivalent of VAT – doesn’t change in any way that would affect the majority of individuals.
“The Spanish Government continues to face a difficult balancing act. However, it is being careful not to scare off British owners or potential buyers of property by reducing or maintaining certain taxes and by not introducing new initiatives aimed at this market in particular.”
To find out more, contact Judicare via: www.judicaregroup.com