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| | In whose name should you purchase the property?
There are a number of ways to purchase the property: - In your name.
- In the joint names of you and your spouse as co-purchasers.
- In your children’s names or in the name of somebody who will eventually inherit the property from you.
- In the name of a limited company, whether English, Spanish or “off shore”.
Each method has its own advantages and disadvantages. Everything depends on your own personal circumstances. Your legal representative will be pleased to discuss the various ways of buying and to advise as to what would be the most advantageous method to fit your circumstances.
It is worth paying careful attention to this point because of the potential tax and other savings, which can be made at a later stage.These tax savings arise because of the Spanish system of inheritance tax under which gifts on death can still attract very high rates of taxation.In the past, some gifts attracted rates of over 80%. These tax level no longer exist.The savings also arise because of the fact that each time a property changes hands, certain taxes and fees become payable. If, therefore, you can prevent the property being inherited and minimise the number of times it changes hands, you can greatly reduce your tax liabilities.
As always, with tax savings schemes there is a danger that the Government can come along and close the loopholes that allow the schemes to operate and, as always, there are disadvantages to them as well as advantages. In each individual case, you will have to weigh up the advantages and the disadvantages and decide how you wish to deal with the purchase.
Are there any other things I should do if I buy a property?
We believe that it saves a great deal of time and effort later on if you review your English Will and make a separate Spanish Will. As a general rule, the cost is very small. It is also worth considering giving a member of your family an English Enduring Power of Attorney.This would enable your legal representative to continue dealing with your affairs even if you should become incapable of doing so yourself.
It is highly advisable for any person who has a property in Spain but does not live there all the time to nominate a fiscal representative.This is a person to whom the tax authorities can send all correspondence relating to your affairs in Spain, secure in the knowledge that it will arrive.
The fiscal representative must be a resident of Spain, but it is for you to choose whom to appoint.It can either be a friend, a neighbour, a lawyer or your tax adviser.You will wish to have the electricity, water and rubbish collection charges transferred to your name. You will need to notify the Town Hall that you own the property, where you will also register for local rates.
You will need to register with the Spanish authorities for tax and other purposes. If, by this time, you have not opened a Spanish bank account,you will need to do so as it is usual for such things as electricity and water, for example, to be paid for by direct debit from your Spanish account.
Your legal representative can arrange these items for you or alternately you can appoint a local “Gestor”. He is like an official form filler who does this type of work at quite reasonable charges.You should register as owner of the property with the Community of Owners if you live in an apartment block or complex with shared facilities. | |
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