Selling your house as a resident in spain

[Beachcomber]

... it may be cheaper to pay the 3%, walk away, hope that a repayment comes through in the distant future, but maybe write it off as a cheaper option as another possibility!

It is not clear from your post if you are aware of this but bear in mind that the refund of a retention does not 'come through' as a matter of course, you have to apply for it by way of a capital gains tax return.

[pigs-might-fly]

Yes, Beachcomber, I have been told that!
The point is, that if I was given a bum steer by the **** of an accountant and I should have been paying tax these last few years, it may be cheaper to swallow the loss of retention, rather than pay a wodge of cash + fines + fees.

[julian]

"it's quite obvious that these days most sellers will be "making" a loss"

why is it obvious that most are making a loss?

[pigs-might-fly]

OK if we are nit-picking, I suppose those who bought 10 or more years ago will be OK. We are looking at selling (asking price, before the HUGE deductions, for sharks fees & taxes) for around 69 K less (euros) than our property owes us in REAL money!

[frog]

it took my old man 18 months to get his 3% back,non resident,but he got it in the end(no capital gains due)

[pigs-might-fly]

Looking at the Hacienda advice document, shown by the link El Cid so helpfully provided, I think it is possible that the advice I was given was flawed.
Yes, our joint income IS under the limit of 22,000 euros p.a. BUT whilst it is all from pensions, it comes from more than one payer. I.E. our U.K .State Pensions (Mine and SWMBO's), + my own two very small private pensions (one of which IS over 1500 euros a year) + a minute work pension of less than £500 per annum. Total of these is about £3000 P.A.
Am I reading the regulations correctly?

[El Cid]

The real cause of confusion as to who should declare is this often quoted figure of 22000. This ONLY applies if your income has had Spanish tax deducted at source (like PAYE in the UK) and this clearly does not apply to pensions.

The relevant limit is less than half of that, with many conditions attached, as you have found.

In reality almost everyone with income from pensions and investments will be obliged to make a declaration, even those on crown pensions, where they usually get a UK state pension as well, which has to be declared in Spain.

Sid

[pigs-might-fly]

So - what remedy do I have for this plainly wrong advice which emanated from the in-house accountant of a well known firm of lawyers, located in Puerto La Duquesa, who had prepared returns for me previously?
I DID query their advice,(twice) too, but was assured that the accountant had contacted Hacienda who confirmed that no return was necessary.
Incompetent fools - and expensive!

[julian]

I would start off by going and talking to them to see what they say and suggest

[pigs-might-fly]

I think I'll do the returns for 2008, see if that's enough for the purpose and if it is - let sleeping dogs lie!

[Beachcomber]

This has all become very confusing. Are you accepting that you are going to sell as a non-resident and have the 3% retention withheld which you hope to claim back or are you going to try to obtain a certificate of fiscal domicile from the tax office and sell as a resident?

If the former and you submit your non-resident tax return for 2008 prior to the end of the year you will be still within the time limit so there will be no fines or surcharges and you can do this yourself following the instructions in another thread on the matter.

If the latter ask the person who landed you in this mess to obtain a certificate of fiscal domicile so that you can sell as a resident. He may, by hook or by crook, be able to obtain it but if not it will demonstrate to him that his advice was wrong without you having to make any kind of complaint or representation to him.

I know the members of the Spanish legal profession have no morals but finding this out in such a way may place a moral obligation on him to sort out the matter for you.

[pigs-might-fly]

It comes down to money.
If we sell as non fiscally resident there will, as we know, be a retention of 3% against the possibility of capital gains tax. Say this comes to 4500 euros, hypothetically.
If I can just do tax returns for 2008, it will cost 60 euros, from another gestor, (160 from the original idiots!) plus any tax which might be due. I was previously paying around 600 -700 euros a year before the advice I mentioned. That is why I queried the advice twice!
OK - that could be an investment of, say, 750 euros, to have the advantage of NOT paying 4.5 K straight away on sale. Worth doing.
I don't want to do a return on line as I think I will be committed to the figures I enter there. Is there a tax calculator on-line which could give an idea if tax IS or is NOT payable?
If, on the other hand, I do have to prepare returns for the "missing" years, assuming the same costs & taxes plus unknown fines, that will be an extra three years which could amount to around 2500, say. add the cost for 2008 and there is a total of around 3250 to bring me up to date for 2008. Taxes for 2009 will be due in a few months - in the present market we are unlikely to sell & complete in 2009.
As a minimum, therefore I'm looking at around 4000 euros in costs, payable out of income (not possible!) to get a certificate to avoid paying 4500 out of capital, which will available on sale.
No brainer!

[Beachcomber]

What I am trying to get at is that if you sell as a fiscal non-resident the backlog of taxes would be non-resident taxes not resident taxes. It obviously depends on your circumstances which works out more.

The period for paying tax for 2008 is still valid until 31st December so you could just complete this one then submit your capital gains tax return and hope for the best. The result may be that they will say that they cannot process the return because taxes are still due for 2005, 2006 and 2007 or they may just deduct what they think is due and give back what's left.

[pigs-might-fly]

Thanks for all your advice, Beachcomber.
I think I will pay the gestor his 60 euros and see IF any tax is due on current income and if so, how much.
I can then decide if I want to submit the return & pay the tax due or just let the status quo remain. It will also give me an idea if any tax is due for the "missing" years and a rough idea of what it will be.
As I said - if the likely total of taxes and other costs is approaching the 3% retention, I'll just accept that and walk away. I have already taken the possibility of losing the retention into my worst-case scenario when working out the likely amount of £££ we will have on transferring euros back to the UK. Obviously the exchange rate at time of transfer is of much interest, too!

[El Cid]

It's not too difficult to work it out. PM me your email address and I will send you some info which might help.

You don't actually do your tax return online - you download a program (the same as the one your Gestor uses) and do it all on your PC. When you are happy with it, you print it off and get your bank to send it off. Once you know your way around the program it takes a few minutes to complete. Gestors don't tell you how easy it is because they would rather rip you off for €60 for 5 minutes work!

Sid

[masterob]

Am I correct in saying that you can also make an appointment and go into the local tax office where they will do the tax return for you?

[El Cid]

Yes, they will, but if you are concerned about the possible outcome this may not be the best bet for PMF.

It's certainly the cheapest and easiest way. Basically they will accept whatever figures you put in front of them - it is not their job to question them.

In the longer term, if you have under-declared your income etc. then they can instigate a tax inspection and then you will have to justify what you have submitted. That said, the fact that a foreign resident even gets round to declaring anything comes as a complete surprise to them so a tax investigation (for you average impoverished pensioner) is not very likely!

Sid

[pigs-might-fly]

May I offer my public & heartfelt thanks to the knowledgeable and hugely helpful posters on ACom.?
You truly are STARS!
I'm grateful!