| | | Spanish Holiday Home Taxes - Sipps Guide.com
( Posted 25th July 2006) An interesting article appeared in The Observer over the weekend. The main thrust of the article is that Spain has been told by the European Commission to stop discriminating against foreign property owners by charging them higher taxes. At a time when millions of pounds of pension money is about to be spent on foreign holiday homes through SIPPS Pensions this article raises some serious questions about the value of owning a holiday home. At the moment foreign property owners in Spain by an incredible 35% tax on any capital gains that they make on property. In comparison Spaniards only pay 15% tax. The officials at the European Commission say the 35 per cent tax rate for foreign property owners, as opposed to 15 per cent for local Spanish Residents, 'results in a higher tax burden on non-resident individuals in situations objectively similar to those of residents.' This move comes as the European Commission has started to look closely as the laws of its individual members in order to ensure that the fall within a Europe wide policy. The Spanish have yet to comment but many people believe that they will change this policy as part of Spains wider policy on making its taxes more transparent. Spain has always had a large, black economy and one of the key areas for tax avoidance has been property tax. So in a perverse way if the tax obligations were lower more people may be willing to pay the tax and in return the government would receive more revenue. Other Articles |
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