Holiday Home Owners Automatically Debited Taxes & Fines – The Spanish Tax Office is now issuing private bank embargoes for failure to pay non-resident taxes

Filed under : Conveyancing & Property Law, Property, Tax Planning - Inheritance

With
Spain’s
desire to improve its public accounts deficit, the tax collecting
infrastructure has been significantly improved, enabling the tax office to
recoup back taxes faster and more efficiently than ever before. This now
commonly includes automatic debiting of owed taxes and late payment fines
direct from non-resident bank accounts in Spain.

De Cotta Law Conveyancing

As
a holiday home owner in Spain
one is obliged to comply with Spain’s
non-resident fiscal and tax obligations.

Some
non resident property owners have been receiving tax notifications and are not
aware that their failure to respond can ultimately lead to embargoes on bank
accounts. An embargo is a court approved sanction, allowing private bank
accounts to be automatically debited, or frozen in the event of insufficient
funds.

This
is because the tax authority is now stepping up its work on recovery of unpaid
taxes and property ownership carries with it fiscal and tax obligations that
must not be avoided.

For
those making their annual tax declaration with a law or accountancy firm your
adviser can provide you with copies of your annual returns if you receive any
notification from the tax authority or ‘Hacienda’.

You
would expect to receive an informative, warning letter first but if you or your
advisor have not kept your contact address up-to-date following a sale, this
can lead to delays and a failure to react can lead to problems.

For
example you may have sold a property and therefore not be paying the annual tax
but the tax authority might still advise you as they have a record of your
previous annual payments. Again for most people this just means providing a
copy of their deed of sale to the tax authority to show that they have no tax
to pay.

Some
property owners who purchased in the boom years did not commence annual payment
of the non resident taxes and this can result in fines and embargoes once the
property ownership comes to the attention of the tax authorities. The cost of
appointing a professional to do your tax returns and the tax payments
themselves are considerably less than picking up fines of 3.000€ or more for
unpaid taxes. Even if you have not paid for some years it is still worth making
up the payment for the last 4 years to avoid any embargo on your bank accounts
in future.

Act Now

If
you are not a tax resident of Spain
but own property here, you must act now, and declare your up-to-date property
investments. Action is much easier and cheaper than reaction.

A
calculation of the tax can be provided quickly and accurately. Each owner is
liable, but a couple would pay less than 175€ including IVA, and more joint
owners receive a discounted rate in fees to make the declaration; so do ask for
advice on this very important matter. This is a small price to pay compared to
the very costly and lengthy process of dealing with embargoes and late tax
fines.

For
more information about Property Law, Tax or to book a private consultation
please contact De Cotta Law.

Head Office Spain
(Mijas):

Centro Comercial Valdepinos 1 y 3ª
Urb. Calypso
29649 Mijas Costa (Málaga)

Tel.: +34 952 931 781
Fax: +34 952 933 547

Monday to Thursday 09.30 – 17.30 – no siesta
09.30 – 14.30 Fridays

E-mail: [email protected]