Taxes for Resident

[alicia]

Hi

Just wnted to check what taxes I should be paying each year as a permanent resident. I live in one house and have other small house which needs doing up. Also, do I need to do a tax return every year!!!!

Any help would be greatly appreciated.

[El Cid]

Hi

Just wnted to check what taxes I should be paying each year as a permanent resident. I live in one house and have other small house which needs doing up. Also, do I need to do a tax return every year!!!!

Any help would be greatly appreciated.

As a resident, you do not have to pay the "Imputed Income Tax" on your property but you will have to pay income tax on your world wide income, apart from some exemptions such as government pensions.

Whether you have to declare for tax depends on your income but unless it is very, very small you are obliged to submit a tax declaration before the end of June for any income received in the previous year.

If the declaration ends up with zero tax due then you can probably get away with not doing it every year unless your income increases to the point where tax is due.

It is important to do it at least once so that you get properly registered into the tax system as in the future you may need to take advantage of the special deals that apply to tax residents regarding Inheritance Tax and Capital Gains Tax.

Sid

[julian]

and pay the IBI yearly on each property, and basura if your town has basura bills

[El Cid]

I missed the fact that you have two properties.

In which case you will pay "imputed income tax" on the second property based on its catastral value just like a non resident does. The only difference is that it is not a separate declaration, it is included in your normal income tax declaration.

Sid

[janda_grant2]

Last year we got the local abagado to "do" our tax return (at the exorbitany cost of 25€ for the two of us) and he wanted a copy of the IBI, any idea why?

[El Cid]

Was that for your full income tax return? If so that's a very good price - some would charge you €200.

That said, it actually only takes them about 10 minutes to do it so it's probably a fair price for a change!

You have to enter details of the property you own on the tax return and the IBI receipt gives all the details - that's probably why he asked for it.

Sid

[janda_grant2]

Was that for your full income tax return? If so that's a very good price - some would charge you €200.

Sid, yes it was for the full return. We used the same chap as a the locals and were charged the same - how do I know? We we were on the "list" along with everyone else with the figure 25€ at the top!

[El Cid]

Good luck to you - you must be one of the very few who have not been ripped off by the usual Assesores/Financial advisors etc.

Sid

[janda_grant2]

sID,
We did get ripped off once, but took local advice and used the local man. Much better service as well, they filled in all the forms, all we had to do was sign. They even took the forms to our bank, which is in the next town about 15k away. So guess where we'll be going this year?