Applying for Residency

Do you have a query on how to get things done in Andalucia, where to find things, who to call? Find out by posting and hear about others experiences.
El Cid
Andalucia Guru
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Location: La Herradura, Costa Tropical, Granada

Re: Applying for Residency

Postby El Cid » Wed Apr 11, 2018 7:30 pm

Possibly, but nothing works better than a proper tax declaration and it is no more difficult to complete. It wouldn’t surprise me if the Form 030 just went into the bin!

Sid

onlinelee
Tourist
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Joined: Tue Jun 09, 2015 8:36 am

Re: Applying for Residency

Postby onlinelee » Thu Apr 12, 2018 8:32 am

Sid, going off my original subject ( and still waiting for a recent Almeria applicant for Residency without income to reply ) you mention in your last post but one CGT - at a recent meeting with an FA I was informed there is no allowance for CGT in Andalucia?

El Cid
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Re: Applying for Residency

Postby El Cid » Thu Apr 12, 2018 11:26 am

There are two ways of avoiding CGT (anywhere, including Andalucia). The first is to reinvest the sale proceeds in another permanent residence or if you are over 65 there is a total exemption. In both cases you must have owned the home for 3 years and be a tax resident.

Sid

Paddy Pumpkin
Resident
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Location: Madrid

Re: Applying for Residency

Postby Paddy Pumpkin » Thu Apr 12, 2018 12:17 pm

onlinelee wrote:Sid, going off my original subject ( and still waiting for a recent Almeria applicant for Residency without income to reply ) you mention in your last post but one CGT - at a recent meeting with an FA I was informed there is no allowance for CGT in Andalucia?



Partly true...you get a personal tax free allowance which you can use against a capital gain. Any capital gain is put in the column of savings income and taxed as savings income (Tax Rate is progressive form 19 to 23%). You can then use your EUR 5,550 basic personal allowance against that tax bill. (Higher tax free allowances are available if you are over 65 or have kids etc etc).

There are other ways CGT can be avoided as Sid has put forth.

My unsolicited tuppence worth...Beware FAs I have yet to meet one who does not try to tell you your tax bill will be higher than it really will be.

onlinelee
Tourist
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Joined: Tue Jun 09, 2015 8:36 am

Re: Applying for Residency

Postby onlinelee » Thu Apr 12, 2018 1:18 pm

Thanks Sid & Paddy,

I should have been clearer, I was referring to CGT on investments, not property. Again, I may have misunderstood the FA in regards to allowances, although as a non earner you would have thought he would have pointed out that I can make a tax free gain as long as its within my personal allowance - super, thats good news and really helps me:-)

Paddy Pumpkin
Resident
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Location: Madrid

Re: Applying for Residency

Postby Paddy Pumpkin » Thu Apr 12, 2018 1:49 pm

As you are living off cash in the bank you should in mind that interest on deposits is taxed...that will eat in to your personal allowance.

If you are planning on living off investments Spain is not very tax friendly for that....although still better than many EU countries By far and away the most tax efficient investment is property rented out. It is virtually tax free when you consider you can write down lot's off expenses and 3% of the purchase price (excluding land value) is an allowable deduction every year. Even if you do have a taxable profit...only 40% of the profit is taxed.


Quick example...buy an apartment (so small land value) cost 110k---10k for the land
Rent it out get 5k per annum
Deductions maintenance, agent etc etc 500 per year
3% purchase price write down 3k
Net Profit 1,500 = (5k-3k-500)
Taxable profit 1500@40%= 600 (maximum tax rate on 600 could be 48%) so call it 300
So on a real net income of 4,500 (5k-500) the most tax you pay is 300 EUR

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gerryh
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Re: Applying for Residency

Postby gerryh » Fri Apr 13, 2018 8:56 am

El Cid wrote:There are two ways of avoiding CGT (anywhere, including Andalucia). The first is to reinvest the sale proceeds in another permanent residence or if you are over 65 there is a total exemption. In both cases you must have owned the home for 3 years and be a tax resident.

Sid

I know I'm going off topic.
My wife and I have jointly owned our house for 14 years.
So when one of us dies and the other inherits the others share, so now owns the house in their own name, does the previous joint ownership cover the "owned for 3 years"?
We are both tax resident and over 65.
Cheers
Gerry
Gerry Harris

El Cid
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Joined: Sun Oct 24, 2004 10:42 pm
Location: La Herradura, Costa Tropical, Granada

Re: Applying for Residency

Postby El Cid » Fri Apr 13, 2018 9:41 am

If it has been your main residence for three years - which it has - you're OK.

Sid


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