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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
Coming together to commemorate the Great War 2014 MARKS 100 years since the start of the First World War and throughout the centenary (1914-2018) there will be a programme of commemorative events taking place throughout the world to honour and remember those who served in and were affected by the war. Read the full story on page 17.
See page 62
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 For example newspaper articles confuse primary and secondary residences – the details will not be published in the official bulletin for at least a month.”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. Continued on page 8