Foreign Investment - Taken The Chance?

can't see how the spanish ( or anyone else for that matter) can tax you @25% on rental income you didn't make. that's akin to robbery if you dont rent the property how can they deem it rented and tax you on it? I can understand a fixed rate property tax but not this. when (and if) I purchase a small apartment it will be for my own and familys personal use, renting won't be a factor, and I am definitely not going to pay tax on income I didnt earn. to spain or ireland
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See [broken link removed] and scroll down to "Deemed Rental Income: Impuesto de la renta de no residents declaración ordinaria (IRNR)"
 
thanks asdfg: unreal or what. wonder could we use a tax like that on say the likes of our 'non resident millionaires' ie JP and his mansion in Limerick. should raise a few bob or two.
not as bad as first appears (maths not my strongest point) a property say costing €125000
the 'property' tax on this is between 0.02 and 2.5 %. presumably closer to the smaller amount in this case. then for 'income' tax purposes on notional income, 1.1% of the property =€1375 taxed @ 25% = €343.75. so total tax on a property of €125000 around the €600 mark. not the end of the world and ideally if you even let it for say 5 weeks @275 per week the notional income would match the actual income so no difference in the tax.

out for a few drinks with the lads last night. around 2.30 in the morning the owner of the pub joined us. we were talking about the tiger kidnapping in dundalk the previous week, and how its not safe to have access to large amounts of cash anymore, and he told us about his pop , (wont go into details here but lets just say hes a well know local businessman with a few well know business' in the town , worth a good few million anyway), who was purchasing a property in bulgaria between nascabar and sunny beach. anyway he had to go to the bank to withdraw the money as the seller wanted it in cash. and then he had to take the cash with him to the notary and only handed it over once everything was in order. point of the story is the amount involved €400,000 for this property which the son informed us was now being rented out to the likes of vodaphone ( dont actually think he was talking about a phone company, more the 'likes' of vodaphone- ie this town is awash with call centres ,boylesports,vodaphone, bank of scotland ireland etc and I think he was just using it as a reference) This persons dad is no fool, believe me, and if he has invested €400,000 in bulgaria it because he obviously believes it will make money for him. course totally different from trying to rent out an apartment. if his dad knew he was telling us this I suspect he wouldn't be a happy bunny!
 
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cuchulainn said:
auto: believe that spain has to change its ctg it charges to non spanish people shortly. so maybe sellers are holding back at present to await the lower tax regime. would you think that there might be more properties coming on the spanish market once this lower taxes becomes operative?
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Update on the Spanish CGT issue. From January 1st the new rate for all sellers (foreign and Spanish) will be 18%.

The retention figure on selling to cover the CGT liability (previously 5%) now reduced to 3%, also from 1st Jan.

Important: If you are currently selling a property in Spain, be sure to defer closing of sasle into january, save yourself a packet!
 
Update on the Spanish CGT issue. From January 1st the new rate for all sellers (foreign and Spanish) will be 18%.
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Don't forget you will also have a liability to Irish CGT of 2%.
 
Before you get carried away ...

Investmind said:
Have looked at alot of investments of late and property is definitely the way to go at present..I dont know where else I could have made a 40k profit in 1 yr from selling an aprt after 20% CGT tax
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You haven't .... you only make PROFIT when you SELL it. Or have I missed something from your original post? You may not make your 40K at all, you've probably noticed there's a bit of a storm brewing out there at the moment ...
 
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