What is an N.I.E.?
It is the equivalent of the Spanish DNI, and is an identity number assigned to each person that contains your personal details for legal and fiscal matters. In Spain it is compulsory for everybody aged 14 and above, and it is sometimes required at an earlier age.
What do I need to find out about a property that I wish to buy in Spain?
First, basically, you have to make sure that it is registered in the Property Register under the seller’s name and that it has no encumbrances such as mortgages or seizure orders. You also need to check if payments are up to date on house owner association fees, water and electricity bills, rates and taxes such as waste disposal and I.BI., and of course check on the actual physical condition of the building and its surroundings.
What taxes do I have to pay in Spain if I buy a property here but I am not resident?
Non-resident income tax and I.B.I. once a year. Purchase taxes and capital gains on selling a property.
Why do I have to pay income tax in Spain if I don’t rent out my property and I already complete a declaration in my own country?
Because all second homes in Spain, even when they are not rented out, are subject to a minimum income tax rate of 1.1% of the property value. Anyone who is not resident in Spain has their principal home in another country, and so obviously any property here is considered as their second home.
If I apply for residency in Spain, will I pay less tax?
Tax payments depend on the agreement signed between your country and Spain. In general, you declare all your worldwide income in the country where you are resident for tax purposes, i.e., in Spain you would declare all income obtained in all countries.
The applicable percentage varies according to the total amount declared, ranging from a minimum of 24%, to 43%.
If I haven’t made a will, will my heirs lose their rights to any properties I have in Spain?
No, unless nobody pays taxes for years and the property is seized for that reason. Your heirs will have to make an heirs’ declaration in front of a judge in your country. authenticate it, and then together with the other documents they will be able to arrange the statement and acceptance of their inheritance.
If my husband and I are co-owners of a property and one of us dies, do I have to do something or does the survivor automatically become the full owner of the property?
No, the heirs that are stated on the will have to sign the statement to accept the inheritance, and to pay inheritance tax on it.
If I am resident on the Canary Islands will my heirs have to pay inheritance tax?
If you have been resident for the last five years on the Canary Islands and you can demonstrate it, generally through your income tax declaration as a resident, your heirs will be 99.99% exempt, provided that they are close relatives and that the Law classifies them as next of kin groups I or II.
If I am resident in Spain and I sell a property here, will I still have to pay capital gains or will I be exempt?
Yes, you will have to pay it, but not until your annual income tax declaration the following year. The capital gains you obtain is added to all your other income that you declare, so the percentage will vary according to this total.
Why doesn’t my neighbour pay taxes in Spain and I do?
He might have been misinformed or not informed at all, but in any event, being unaware of your fiscal obligations is no excuse for not paying taxes and it does not exempt you from complying with your payments to the Tax Office.
It is also possible that he doesn’t want to pay, and is taking the risk of having the debt reclaimed with the corresponding fines and surcharges. And he won’t be able to apply for any tax returns, if he is eligible for them, unless he has already paid his annual taxes.
How can I transfer my property to my children’s name at a minimum cost?
You should sign a deed of donation before a notary. Your children will have to pay the corresponding taxes, and the best idea is for parents to retain lifetime usufruct, in order to reduce the value of the property that is being donated and therefore reduce taxes too.
If I want to sell, buy, inherit or donate properties in Spain do I need to go through a lawyer?
In Spain you do not have to use a lawyer’s services by law in these cases, but it would be wise to use a lawyer’s services to avoid any problems if you are not fully versed in the law or the language of the country which is not your own. But the decision is up to you.
Where can I apply for an inhabitant’s certificate [certificado de empadronamiento] so that I can be eligible for reduced transport between the islands or to the mainland?
You need to go to the council to which your property belongs. All councils will issue it at present, although in our opinion this is a misinterpretation of the law if it is given to people who are not resident. However at the moment you only need to be a house owner and have an N.I.E.
Should I change the utility contracts for electricity, water and telephone to my name if I buy a property, or should I just change the bank payment details?
Yes, especially your electricity contract because electricity companies are making a lot of changes at a documentary level and if the utility contract does not match the house owner’s name they will not provide any assistance or information.
Should I get the electricity installation checked before I change the contract to my name?
Yes, if more than 20 years have passed since the last contract was signed, a new certificate will have to be issued and endorsed by the authorities before you can sign a new contract.
I have just bought a property in Spain. How can Teide Sur, S.L. help me?
First we check that the purchase has been registered in the Property Register, and we also check on the situation of all utility bills, such as electricity, water, etc., in case the contract holder’s name has not been changed or the direct debit has not been arranged, also making sure that there are no debts pending with any of these utilities. We do the same for the I.B.I. and any other local taxes such as council capital gains.
We inform you about income tax and other taxes, how to calculate it and when to pay it. We explain how to calculate capital gains if you have sold a property and we answer any questions you have on inheritance, helping you to calculate it if you so require.
From then on we do anything we can within our reach on your behalf, informing you of any services such as home insurance, car insurance and road tax, how to set up a telephone line, broadband, where to find certain things in your area, how to send for an expert and who to go to for any problems that may arise, etc., and in general we can manage and resolve all these issues on your behalf, offering you an estimate beforehand.
Then it’s up to you to decide.