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Realistbear

BIG FAT SPANISH THREAD

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I am not sure if it is the crisis itself that is driving the Brits and others out of Spain. Rather, I think it is taxation.

Some time ago Spain introduced a reporting requirement whereby all assets, worldwide, over (I think) €50,000 have to be declared to the authorities there. This has probably put a lot of Brits in a rather tricky position. Spain taxes second properties on imputed rents, so...If you are tax resident in Spain and own a house in the UK(for example), you will be taxed by Spain on the imputed rental income derived from that house.

The tax base is around 2% of the value of the property, multiplied by 24% (these figures are approximations). That means that a Brit with a house in the UK valued at, say, €500,000, would be taxed at around €2500 a year.

Well, there is a way round this. If you declare a rental income from the house, you will be taxed by Spain on that income instead.

I wonder how many Brits (and others) have retired to Spain, become resident, and quietly let their home country house without declaring the income? If they have done this, they are faced with a tax bill for imputed rents. Alternatively, they could fess up and face a hefty for not declaring the income, and another fine for not declaring the asset. Oh, then there is wealth tax...

No wonder they are leaving.

Imputed rent the way to create growth in GDP! Especially if they use the ONS data.

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http://www.zerohedge.com/news/2014-06-11/will-spain-default

With 10Y yields trading below those of US Treasuries, asking the question of Spain's rising default risk seems risible but as Bloomberg's Maxime Sbaihi notes, the longer the euro flirts with deflation, the higher the risk that the heavily indebted (and becoming more so) countries will be tempted to default. Of course, this 'concern' is entirely ignored by the 'market' as Draghi has promised enough liquidity to soak up every short-dated bond but as the European Union's so-called "1/20 rule" suggests - requiring states to reduce excessive (over 60% Debt/GDP) by 1/20th every year or face a fine of 0.2% of GDP - Spain, it appears has 5 options to escape this vicious circle... and one of those is restructuring...

20140611_spain_0.png

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I am not sure if it is the crisis itself that is driving the Brits and others out of Spain. Rather, I think it is taxation.

Some time ago Spain introduced a reporting requirement whereby all assets, worldwide, over (I think) €50,000 have to be declared to the authorities there. This has probably put a lot of Brits in a rather tricky position. Spain taxes second properties on imputed rents, so...If you are tax resident in Spain and own a house in the UK(for example), you will be taxed by Spain on the imputed rental income derived from that house.

The tax base is around 2% of the value of the property, multiplied by 24% (these figures are approximations). That means that a Brit with a house in the UK valued at, say, €500,000, would be taxed at around €2500 a year.

Well, there is a way round this. If you declare a rental income from the house, you will be taxed by Spain on that income instead.

I wonder how many Brits (and others) have retired to Spain, become resident, and quietly let their home country house without declaring the income? If they have done this, they are faced with a tax bill for imputed rents. Alternatively, they could fess up and face a hefty for not declaring the income, and another fine for not declaring the asset. Oh, then there is wealth tax...

No wonder they are leaving.

I recall that, but had not heard of Spain actually trying to tax people on any overseas wealth. However markets move at the margin, and just the implication and concern can be enough to make people sell up (at lower prices). Almost makes you think Spain wants lower house prices in some areas.

Anyway that second property (UK) wouldn't concern me having never owned a UK home, given the mad crazy prices here, and looking for ever more expensive prices as 'recovery'.
Spanish Asset Declaration Law
Started by Nationalist, May 02 2013 03:49 PM

Even the Government isn't saying what it will do with the information.

I can understand why ex-pats (not just Brits) find at all rather sinister.

Taxation
Britain has a double taxation agreement with Spain to ensure people do not pay tax on the same income in both countries. The text of the agreement can be found on the HMRC website.
In accordance with Spanish and international law, all residents in Spain (nationals and non-nationals alike) are required to declare assets or groups of assets held outside Spain. Assets may include bank accounts, securities, rights, insurance, annuities, property, etc and the declaration is a separate exercise to the annual tax return.
To reinforce this obligation, and as part of the Spanish Government’s anti-fraud law, the Government requires all residents in Spain to file an annual informative declaration of assets held overseas by 31 March each year. Severe penalties for incorrect, incomplete or late reporting can be incurred and the legislation also means that criminal charges can be brought in the case of non-compliance.
Taxation is a complex issue and it is strongly recommended that professional advice is sought. The English language page of the Spanish Tax Authority website can be found on the Agencia Tributaria website.

I know of the muncipal property tax or ibi, or whatever its called.

19 June 2013

...Peter Shelley, 71, and his wife, Victoria, 68, have been waiting two years for a refund of £5,108. The Shelleys made a £255,400 loss when they sold their villa near Marbella in 2011.
The couple feared the country’s economy would never recover and they would be stuck overseas. However, they have now moved to Caerwent, Monmouthshire. Mr Shelley, a retired businessman, says: ‘We decided to leave because things had taken a turn for the worse.
‘There were soup kitchens opening up down the road and there was a strange atmosphere in the town where we lived. We lost a lot of money on the house, but we felt we made the right decision. Not getting back the money we paid to the government is the final straw.’
Part of the problem is that in order to get a refund, foreign sellers must keep a current account open in Spain. These accounts often charge a monthly fee. So in order to avoid going in to the red, customers are forced to top them up.
Cheryl Round-Turner, from Northampton, has been waiting two years for the £5,108 she is owed on the sale of the two-bedroom flat near Marbella.
Mrs Round-Turner, 65, lost around £100,000 when she sold the property in 2011. She says: ‘It is outrageous I have been made to wait so long for money that is rightfully mine. There is no way I could have made a profit on my house and I am totally up to date with my taxes.

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Not really sure about that.

Spain attracts millions of tourists from the UK, Ireland, Germany etc because it's only 2 hours flight or so, and gets plenty of sun. (ok so it's not dangerous like parts of north africa, and plenty of hotels, infrastructure already built). The Chinese surely have far more destinations a lot closer to hand?

They do but not the same European historic appeal. They love visiting beautiful cities and shopping in Europe - London, Paris etc. In Spain that is combined in Barcelona, Valencia, Madrid etc with stunning coastlines and weather.

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NIRP Strikes: Spain To Create Tax On Bank Deposits

banksters_robbing_sheeple.jpg

It was a little over a year ago, just as the Cyprus deposit confiscation aka "bail in" was taking place, when we asked, rhetorically, if "Spain is preparing for its own deposit levy" when an announcement by Spain's Finance Minister, Montoro, hinted at the imminent arrival of just that. Of course, back in March 2013 imposing such a tax would immediately bring up images of parallel bank runs in Cyprus and visions of confiscated deposits, culminating in an immediate collapse of the otherwise already insolvent Spanish banking system. In other words, the timing picked by Montoro to reveal what was coming couldn't have been worse. Now, however, things are different. So different, that as Bloomberg reported moments ago, Spain is set to create a tax on bank deposits. Coming to an insolvent country near you.... everywhere.

On the NIRP HPC thread as well.

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More economic news from Spain, confirming the upturn (as well as falling unemployment plus record rises in tourism). Business activity index for April up 4.2%. May retail sales up 0.5% YoY.

What the government IS doing, is putting a stop to footballers paying reduced tax - what was known as the Beckham law:

http://elpais.com/elpais/2014/06/24/inenglish/1403603338_446068.html

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More economic news from Spain, confirming the upturn (as well as falling unemployment plus record rises in tourism). Business activity index for April up 4.2%. May retail sales up 0.5% YoY.

What the government IS doing, is putting a stop to footballers paying reduced tax - what was known as the Beckham law:

http://elpais.com/elpais/2014/06/24/inenglish/1403603338_446068.html

Beckham law applied to everyone - not just footballers.

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More economic news from Spain, confirming the upturn (as well as falling unemployment plus record rises in tourism). Business activity index for April up 4.2%. May retail sales up 0.5% YoY.

What the government IS doing, is putting a stop to footballers paying reduced tax - what was known as the Beckham law:

http://elpais.com/elpais/2014/06/24/inenglish/1403603338_446068.html

Hang on a minute.....

http://www.efe.com/efe/noticias/english/portada/spain-approves-new-billion-euro-stimulus-package/4/63/2337813

"pain's government on Friday approved a new 11-billion-euro ($15 billion) plan featuring 40 measures to spur growth, competitiveness and efficiency."

If I spanked £11B you'd see in the local economy.

FFS.

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Hang on a minute.....

http://www.efe.com/efe/noticias/english/portada/spain-approves-new-billion-euro-stimulus-package/4/63/2337813

"pain's government on Friday approved a new 11-billion-euro ($15 billion) plan featuring 40 measures to spur growth, competitiveness and efficiency."

If I spanked £11B you'd see in the local economy.

FFS.

The increase in exports, tourism, manufacturing and now even retail sales, has come about prior to these measures (yet to be enacted). There's a rumour that this new plan may *just* be connected with the elections due next year - but maybe that's being cynical?

And it's possible that the spanish property market, after several years, has hit a floor, but we will see...

http://www.spanishpropertyinsight.com/2014/06/12/spanish-property-market-grows-second-consecutive-month/

Edited by Trampa501

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June 2014 unemployment fals by 123, 000 and the new number of people entering workforce increases by 56, 000 in the best figuresin June since 2007

http://m.abc.es/economia/20140702/abci-dato-paro-junio-201407020840.html

summertime...same thing happens on the cote dazure every year.

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11 consecutive months of seasonally-adjusted falls in unemployment.

They really shouldn't be fooling anyone trumpeting any kind of growth figures (especially in percentage terms) from their post-2008 base. They have managed to lift their head slightly of the tarmac during a sustained upswing in the business cycle. What happens when it turns down again?

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Well Looks like the recovery is going to plan in Spain apart from a few hundreds of millions down the pan

http://www.roundtownnews.com/index.php?option=com_k2&view=item&id=47896:corvera-airport-costs-22-000-a-day&Itemid=355

They need to screw up £10 billion on a nhs IT project to really boost the economy! :)

IMF doubles growth forecast for Spain in just 6 months

http://elpais.com/elpais/2014/07/11/inenglish/1405070513_901896.html

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Spain is a big country with lots of resources, it never took part in recent wars, a safe place to live and the sun shines.....its housing is no longer over priced, now a far more realistic price and people seem to live a reasonable life on less, living a similar quality of life that of people in other parts of the world who have to earn double for the same or less. ;)

Edited by winkie

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picture-5.jpg
Spanish Bond Yields Tumble Below 2.5% - Lowest In History

20140728_what.jpg

European peripheral bond yields have compressed from "whatever it takes" highs to "whatever..." lows in the last two years as no amount of factual representation of the dismal reality of Europe's non-recovery can affect the centrally-planned virtuous cycle of ECB carry-trade funded idiocy occurring in the bond markets. Theoretically, Draghi's removal of the credit risk/convertibility premium has left these bonds to trade on growth/inflation expectations alone... and at record lows, they don't seem too hopeful. While Spain 10Y dropped below 2.5% (and we could list 20 fundamental factors that flash red), we thought it ironic that as Italy's 10Y drops below 2.7% for the first time in history it is delinquent on $100 billion in services rendered to its private businesses.

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Spain’s gross domestic product rose more-than-expected last month, official data showed on Wednesday.

Analysts had expected Spanish GDP to rise 0.5% last month In a report.

Instituto Nacional de Estadistica said that Spanish GDP rose to 0.6%, from 0.4% in the preceding month.

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