Does Spain want foreign investments? You would think that especially with its huge deficits the answer would be yes. This is hard to believe when one looks at the huge hike in costs when purchasing a property or carrying out any transaction.
The costs for purchasing a property have risen. This included the rise of the seven percent transmission tax on second hand properties to eight percent for properties under the four hundred thousand price and above that the tax is increased a further percent to nine percent and so on.
Notary costs increase in line and of course, not to mention the recent increase in IVA taxes.
When buying a holiday home at a bargain price. You receive notification, or not, you may just find the money is taken from your bank account for a (complimentaria ) Putting it plainly. An unexpected extra tax bill, months or a year later. You had already declared the price you paid at the notary and paid the relevant taxes. Unbeknownst to you, the state decides that this tax should be paid on the value THEY have put on your purchase.
There may be no incentive to invest in Spain as there are not discounts available on the nonresident annual tax declarations, no discount on rates. Then there is the penalization when it comes to Inheritance tax. There is no possibility of availing of any of the discounts here.
The icing on the cake must be, the new rule which have been in place for a while. Most people know that you need NIE number for all legal and other transactions in Spain. Anyone who is not a resident will have to renew this document themselves, paying the tax of course or pay for the services of a legal representative with the added cost of obtaining a power of attorney.
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