Property law Spain has changed on January 01.2008.
I have just received news about 2 new laws from my tax advisor in Spain. Tenerife is Spain.
Text was written in German which I have translated. literally.
A similar text in German may be seen on my tax consultant's home page.
Therefore, Property investment in Tenerife becomes even more interesting for saving money for loved ones.
However, they must also be residents in Spain.
You may, of course, check out this new law with a solicitor or your own tax adviser.
A relevant news alert was published in the Media.
Several new laws apply to all Spanish autonomous regions such as all Canary Islands including Tenerife as far as inheritance tax redemption as well as donation tax redemption is concerned.
The redemption is 99.9 % and is stipulated as follows.
The relevant entry/law in Spanish under 'Ley 14/2007 and 27.12.2007 de Presupuestos Generales de la Comunidad Autonoma de Canarias para 2008 as well as Resolución de 28. Enero 2008 de la Administración Tributaria Canaria, Gobierno de Canarias para la correcta Gestion'.
The property law Spain and Tenerife redemption regarding inheritance tax applies when the diseased had his/her main residence on the Canary Islands and, when he died after 01.January 2008.
This proof must be presented at the Receiver of Revenue by tax declarations of the last 5 years. Those must very clearly show that the diseased had declared his world wealth at the Receiver of Revenue on the Canary Islands.
Names of cohabits called 'Parejas de Hecho' in Spain who are persons living together without wedlock will be accepted when they are accordingly registered.
The same Spanish inheritance tax redemption by the new property law Spain autonomous comes into effect
when both partners' names,
even when not married,
figure already in title deeds which may mean
that both are equal owners of a real estate property.
The party or person who may enjoy inheritance tax redemption must be resident on the Spain Canary Islands or Tenerife.
Nothing is changing for tax payers who are not residents when it comes to inheritance tax. Their tax tariffs remain the same as before which may be calculated for the individual tax payer by a good tax consultant (gestor) in Spain.
This new law was supposed to be for resident as well as for not-resident tax payers owning property on Canary Islands.
However, due to published news which lead to misunderstanding it must be clarified, nothing much has changed for non residents.
The tax redemption for Spanish donation taxes is always 99.9% when the beneficiaries are spouses, children, grand children, grand parents etc.
This law is only for real estate, fonds, jewelery, cars etc. except for people who are tax paying residents on the Canary Islands.
Only residents may avoid inheritance tax by
donations: To avoid this, simply buy property in the name of children or loved ones while keeping usu fruct rights for yourself. Safeguard all other rights for yourself by a large or total power of attorney!
Therefor and for other reasons, given in property investment in Tenerife is always a good idea.
Residents may donate their real estate to their spouses or children while they are still alive.
Doing so, the owners of real estate will keep the right by usufruct (uso fructo) to use their property while alive but, giving it as 'donation' where a tax applies which will be 0,1% . (This is called nuda propriedad in Spanish).
In the case of death the 'usufruct' will become void by the certificate of death in which case a minimal administration fee will apply depending on age of diseased.
The most interesting change of property law Spain was the abolition of the so called Patrimonio Tax in 2009. The Patrimonio tax was a wealth tax.
A new rental law in Spain gives fundamental new rights to property owners. When a renter has been late twice for rental payment his lease may be canceled under the following conditions: The contract of rent must stipulate the maximum payment delay allowed within a month, such as until date 7th, for example. The renter must have received one written warning previously, which is best done by Burofax.
By the way, looking at property law Spain, I wonder why nothing has been really done to protect European timeshare properties better by law because, after all, it is popular and fraud must not come into it.