OTHER LEGAL MATTERS

Inheritance Tax

This tax is payable on inheritance of property by spouses, children or any other party who receives part of the deceased’s Spanish estate.

Spanish law provides that property registered in joint names is deemed to be held on a 50-50 basis and therefore on the death of one partner the surviving spouse inherits the deceased spouse’s 50% share. At this point inheritance tax becomes a pressing issue as the tax must be paid within 6 months from the time of death.

Inheritance is taxed on a sliding scale which starts at 7.67% rising to 34%. However, if you are a member of a particular class of beneficiary, a distant relative for instance, or you are already wealthy you could find that this rate is in excess of 80%. When assessing the beneficiary’s pre-existing wealth, the Inland Revenue will only take Spanish assets into account for non-residents.

The amount of tax a beneficiary is liable for depends on the net value of his share in the estate. This net value is calculated by establishing the current market value of the property and then deducting any charges that may be applicable. 3% is usually added to this figure to cover contents and personal effects. It is important to note that in Spain, unlike other countries, tax is only raised on the beneficiary’s share of this net value, not on the total value of the estate that has been transferred.

Beneficiaries who are not members of the family will pay higher inheritance tax rates because multiplying coefficients are applied to the basic rates. In the past this was a problem for common law couples, but the Andalucian Regional Government (Junta de Andalucía) has recently modified the law to allow them to benefit from the same tax exemptions as spouses if they are registered with the appropriate authorities.

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1. Finding a Property.
2. Real Estate Agents.
3. Choosing a Lawyer.
4. Negotiating the purchase.
5. The Reservation Contract and Deposit.
6. Exchange of Private Purchase Contracts.
7. Completion.
8. Registry.
9. Special Considerations when buying Off-Plan.
10. Fees when buying.
11. Taxes when buying.
12. Other Expenses.
13. Differences between the contract price & the amount actually paid.

Selling

1. Real Estate Agent & Lawyer.
2. Fees when selling.
3. Taxes when selling.

Charges Taxes & Expenses for Property

1. Service Charges in Communities.
2. Annual Real Estate Tax. ( IBI )
3. Rubbish Collection Tax.
4. Capital Assets Tax.
5. Property Owners’ Imputed Income Tax.
6. The Tax Returns.
7. Insurance.
8. Mortgages.

Other Legal Matters

1. NIE – Identification number.
2. Open Spanish Bank Account.
3. Making a will in Spain.
4. Inheritance Tax.
5. Investment Opportunities on Spain.

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