Impossible to rent now as non-resident in Spain

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dixeady
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Impossible to rent now as non-resident in Spain

Post by dixeady »

We just came back from a quick visit to our house in Andalucia. I was so upset at the tax liability now, post-Brexit, that I have to put it on the market. I was only able to rent, mostly to Spanish people, over July/August. To find that the total income was taxable in T3, at 24%, not a penny of deductions allowed for the huge cost of property managers, not to mention elec/water/internet used by the guests gutted me

How can anyone assume that all income received from rent is 'profit'? Does the Spanish gov really hate Brits so much?

How are others coping with the changed situation? It's all so sad.
costa-brava
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Post by costa-brava »

While I sympathise with everybody who has found themselves in this situation (especially during the Covid measures), I totally disagree with where you lay the blame. I could write a book with reasons why I am so angry with the idiots who proposed and voted for Brexit and for those who believe that the majority of Brits voted "yes". If you look at the real numbers, I mean look at the number who voted "yes" against the total electorate, it is less than 30%.
There have been several people posting in LMH over the years (from the USA, Switzerland, Russia etc) who complain bitterly about how foreign owners are treated. There's nobody hates the British. People here used to look up to Britain. Now they just laugh at the stupidity, especially with wooly-headed Boris.
But for those who feel that it is time to give up, please don't be panicked into giving your property away.
I have always been impressed by the excellent quality of the properties owned by lots of LMHatters and the deamand at the moment is solid.
If you have followed my posts you will know that I am not a lover of estate agents. They will hammer you down on price to get a quick sale before another agent but still want their 5%. And some of them are working on behalf of the buyer, not for you the seller.
According to Spanish law, when a non-resident sells a house, the buyer is obliged to retain (I think 3%) of the selling price. It is put into a special account until you have fulfilled your tax obligations. A significant part of this is the PLUS VALIA, which you will see in my last post, has now been abolished.
Another important factor, if you bought a few years ago, is to check before you go to market that the details in the "escritura" from when you bought, match those in the "Catastro" and the "Registro de Propiedad". If they don't match this will cause substantial problems especially if the buyer needs a mortgage. I can explain this more if you want. It is important.
Marks
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Post by Marks »

The Spanish government do not 'hate' the Brits, they are treating us as third country nationals which is what happens to countries outside the EU. Take your anger out on Farage, Johnson, Gove, the Mail, Express, Sun, Telegraph etc, their lies and the gullible idiots who voted to leave.
Some guests just need a sympathetic pat. On the head. With a hammer.
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roxytoo
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Post by roxytoo »

We are selling one at the end of summer 2022 and keeping the other but not renting out. We already have bookings to next August so do not want to disppoint guests, we have many repeaters. Renting is just not worth it now. As you say tax at 24%, no deductions and now with the last big OTA, spain-holiday, selling out and charging owners and guests its just too much. I was shocked though to learn in our area the fee estate agents charge is min 6000euros plus IVA!!! No where near 5%.Think I may do it myself!
Norfolk Canary
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Post by Norfolk Canary »

Do you not think the Spanish Government will have a rethink? I think the phrase ‘cutting your nose off to spite your face’ springs to mind. Surely they don’t want all the Brits to sell up and return to the UK?
dixeady
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Post by dixeady »

Norfolk Canary wrote:Do you not think the Spanish Government will have a rethink? I think the phrase ‘cutting your nose off to spite your face’ springs to mind. Surely they don’t want all the Brits to sell up and return to the UK?
I really believed that they would make some changes that would help benefit the Brits. Until I came face to face with the dread tax implications last week. I can't believe they want all Brits, who haven't taken residence, to sell up and move back? But there is absolutely no point in renting now, as we stand to actually lose money.
Marks
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Post by Marks »

Brits who haven't taken up residence? Illegal immigrants you mean.
Some guests just need a sympathetic pat. On the head. With a hammer.
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CSE
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Post by CSE »

I do not think the Spanish government do hate the Brits. They have given yet another extension to the deadline to exchange the Drivers License. (For those who live here).
https://www.lamoncloa.gob.es/consejodem ... 11026.aspx
If they did not want them here they could easily have not given (several) extensions to this deadline. The fines would been an alternative.
The tax is for all citizens of non EU countries. Thus it is a change in your tax status. There has been a lot in the press both English and Spanish. There has been over two years of this information.
Never try to out-stubborn your guests.
costa-brava
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Post by costa-brava »

It really hurts when you find yourself in one of life's "cul-de-sacs". It happened to us with the banking crisis and we had to sell up at a huge loss. You want to lash out and blame somebody. But I am reasonably confident that, this time round, owners shouldn't need to take such a big hit on price; provided they stand strong against the estate agents who will try to knock the price down and if owners arm themselves with knowledge before they approach the agents.
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