FREE!
north EDITION
Your English Newspaper
roundtownnews.com
Issue 773
8 - 13 AUGUST 2014
IMPORTANT NOTICE: The next edition of RTN will be out on Thursday 14th August due to a national holiday.
Pensioners lose tax break by Jack Troughton
Louise on stage
Follow your leader By Jack Troughton ZUMBA PRESENTER Louise Groom puts dancers through their paces during last Saturday evening’s ‘Zumbathon’ in Moraira. The keep fit dance movement continues its reign in the popularity stakes – and be a successful fund raiser for charity. For the full story turn to page 8.
PRIME MINISTER Mariano Rajoy’s announcement that pensioners are to lose their automatic exemption to Capital Gains Tax when selling homes has sent shockwaves through the expat population. As part of a package of economic and financial reforms, the Premier said the tax break for people over the age of 65 would only remain if they bought another property or invested in a bank-led ‘pension’ scheme. The government has described the change as a way of insuring the older population supplements its pension. The move – which would come into effect on 1st January 2015 and introduces an enhanced tax – has caused uproar in Spanish circles already deeply untrusting of the banking system, one pensioner describing bankers as a “bunch of thieves”. However, RTN was told the changes to ‘plusvalia’ would particularly hit expats looking to downsize, sell to rent a home and enjoy an income from the proceeds, or sell to return to their own countries. The change would also affect property owned abroad by a Spanish fiscal resident – a little understood part of the controversial declaration of assets exercise. And because precise details of the changes to the tax system have yet to be published, confusion and speculation are rife.
DEVIL Charles Svoboda, a member of campaign group AUN which fights for the rights of property owners and the environment, admitted that “the devils lurk in the details.” He said: “The story is a little confused and the more you read the more confused you get. For example newspaper articles confuse primary and secondary residences – the details will not be published in the official bulletin for at least a month.” Charles said Mr Rajoy and the Finance Ministry in Madrid suggested capital gain from the sale of property must be invested in “some sort” of pension augmentation scheme – mainly available to banks and not necessarily to non-Spanish residents. “Capital Gains Tax, like the inheritance tax, is very much a ticking time bomb for current and would-be property owners. This seems to have come from the Ministry of Stupid ideas; they do not think these things through.” And Charles questioned the benefit to pensioners investing money as an over-65. “Do you walk into a bank with 250,000€ and say ‘I want to buy a pension, what do I get?’ The thing is ridiculous.” He said one example shown on Spanish television said a home bought 25 years ago for 50,000€ and sold in the New Year for 150,000€ could attract a tax bill of 32,500€ under new Capital Gains Tax rules – three times the current cost. Continued on page 3