If I become a Spanish Resident-will it bring problems

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I have bought a place in Spain 2 years ago. My first "property" bill last Aug 08 was 1460.00 euro. I am told that if i became a Spanish resident, I would get a 30% discount on that figure, which would help greatly. But would being a Spanish resident would I become liable for other taxes. ?
Fredda
 
Hi boconnor,

I can't answer your question but post it on [broken link removed] and you might get an answer. The money you paid would have been for a wealth tax which is now abolished since Jan 2008 and also a tax called La Renta - which is tax on income from your property even if you don't rent out you still pay this - Welcome to Spain!:)

Angela59
 
If you become resident for tax purposes then you will be taxed in Spain on your worldwide income.
 
You make it sound like it is a free choice whether to become resident or not in Spain for tax purposes, and that it only affects property tax. As previous poster stated: it affects your status for all taxes. Assuming you are splitting your time between Dundalk and Spain, there are rules for determining where you are resident for tax, based on the facts of where you live and for how long, where you work, whether you own a house etc. see [broken link removed]

IMHO The determination of residence is made by the tax authorities based on evidence and facts provided by you, and not by you based on a free choice (except of course you can change how much time you actually spend in each country, or sell a house, or take a different job...)

If you have a permananent home in a country then you are generally considered resident in that country, unless of course you own two homes....

If you worked in Spain and live in a house you own, but your wife and kids lived in a house you own in Ireland and e.g. your employer and GP & dentist are in Ireland, your centre of vital interests as they call it, would probably be considered as Ireland.

If you regularly live more than 183 days in Spain in a calendar year (and certainly for more years in series) you'd probably be determined to have your habitual abode in Spain.

If you have an Irish passport, you'd be determined to be an Irish national.

The rules are applied in order of importance: home ownership, centre of vital interests, habitual abode, nationality, mutual agreement between tax authorities.

Article 4 Resident
1. For the purposes of this Convention, the term "resident of a Contracting State" means, subject to the provisions of paragraphs 2 and 3 of this Article, any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that State in respect only of income from sources in that State. The terms "resident of Spain" and "resident of Ireland" shall be construed accordingly.
2. Where by reason of the provisions of paragraph 1 of this Article an individual is a resident of both Contracting States, then his status shall be determined as follows:

  1. he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests);
  2. if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode;
  3. if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national;
  4. if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
3. Where by reason of the provisions of paragraph 1 of this Article a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated.
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[disclaimer] I'm no tax expert. You should always get expert advice on tax matters.
 
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