Advertorial The love affair with Spain and Spanish property for the English and Irish continues unabated. A trend set to continue, for quality of life and for long term investment. What does appear abated however is the enthusiasm for the property market. Both buyers and sellers are affected with a slowdown in the market, and often the stumbling block can be the fees, which are an estimated 10% of the house price, and in worse situations can be up to 20%. Rising property prices in Spain and its islands have created a definite slow down in the market. Similarly, vendors are hit with further taxes, and are additionally being urged by agents to lower the selling price to be more competitive. The decision whether to buy is more often based on the total cost of the purchase, which means that the fee proportion (made up of various taxes and service fees) are more considered, and often it is the fees on top which makes the property of choice prohibitive. This wasn’t the case 10 years ago, where the average property price was relatively low, but now, with average house prices around the €250,000+ mark, it makes the 10% fees a considerable additional amount. There has long been a practice of undervaluation in order to avoid such fees – commonly known as ‘black money’, where a purchaser agrees to pay a vendor an amount of money ‘under the table’ or undeclared, in order to present a lower property valuation to the notary and therefore reduce both
The gap between black & white the transfer tax or IGIC fees for the purchaser, and the capital gains tax for the vendor. A practice which bites back in the form of capital gains tax when the new purchaser comes to sell on this property. Recent reports suggest that local banks are actively blocking ‘black money’ deals, rendering completion at the notary impossible. Spain’s Socialist government has launched a crackdown on tax cheats and money launderers who use the booming property market to hide their ill-gotten gains. International publicity surrounding the recent case of a €250 million money-laundering fraud which centred on a law firm in Marbella helped to focus the government’s attention on the problem. Now there is a solution. A method of buying and selling your property in Spain and its islands, with almost no additional costs, and what’s more it’s legally bullet proof. Welcome to bi-cell. Here is an illustration of how the bi-cell protocol would work: A €300,000 property on the market, anywhere in Spain – the vendor receives 300,000€ - with no
estate agent fees or withholding – and potentially no capital gains tax – and the buyer - instead of paying 300,000€ purchase price, plus 10% costs (€30,000), he only pays the purchase price plus €12,000 (€6,000 for the bi-cell product + 2% representing some tax and service fees). Therefore a saving of €18,000 is made by the buyer, and further savings are made by the vendor, depending on their residential status. In the same scenario a €500,000 property purchase using the bi-cell protocol would attract fees of €16,000 (€6,000 for the bi-cell product + 2% representing some tax and service fees), a saving of €34,000 for the buyer. Not only are buyers saving at the point of purchase, but with the ‘bi-cell protocol you can simply and legitimately avoid many other taxes, long term. Additionally, vendors can make their property price appear more attractive if they choose to sell with this protocol in place beforehand.
To find out more – or to register - contact 609 157 453 – or visit www.bi-cell.com.
Time is running out for those who are confused by what they see or hear about Spanish law & tax What should you do?
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928 346 544
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Advertorial
YOU HAVE A DUTY TO YOURSELF AND YOUR FAMILY TO AVOID UK AND SPAIN TAXES Evading taxes involves not telling the truth such as pretending someone is not dead for 4 years - or under declaring assets - in order not to pay tax that is due (which is fraud). Avoiding taxes means organising your affairs in such a manner that you legally properly and legitimately are not exposed to payment of tax. Tax is a dull subject - that most do not want to spend a lot of time thinking about BUT failing to avoid tax means paying taxes which you need not , leaving you and your family – and ultimately your beneficiaries - to enjoy a lower quality of life.
If you are an English speaking person with on estate and affairs in both your homeland and Spain – or - an English speaking person who now lives only in Spain – then you have at least twice as many tax issues to concern yourself with. 1.
If you do not take maximum advantage - relating to tax on your pension or other income from abroad – you will have less money to live on than you are entitled.
2.
If you buy and sell property without taking
proper care, then you may pay 18% capital gains tax and 6.5% property transfer tax which could have legitimately been avoided. 3. If or when you and your partner die, then the survivor - and in time your children - may only receive a half or a quarter of what they would have been entitled to receive. 4. If you own property in Spain then you might spend one or two thousand euros per year on wealth taxes that need not be paid 5. If you do not write a Spanish Assets Will in exactly the correct manner then the important decisions that you take - about who should receive your estate - probably won’t work out as you intended and you will pay 100-200,000€ too much tax.
IF YOU ARE... THEN You should allow Quill Assets to analyse your position – and at no cost – present you with a
single plan - to re-position your affairs - in order that you can legitimately pay the minimum possible - or NO - tax - upon profits, income, capital gains, wealth and succession. You should also allow Quill Wills to re-organise your Wills to make them work for your specific circumstances. To fully understand this crucial information please make that phone call now - to Jenny Harris – 928 346 544.
By Simon Harris F.LLA.FWA
Consultant
www.quillassets.com
Brown targets exodus to the sun
A court victory for the taxman means the chancellor can squeeze more out of the 1 million people who have moved abroad. The Sunday Times, November 19, 2006
Thousands of British people who have moved or retired abroad will be chased for tax going back six years following a court ruling in November. The landmark decision changed whether you must pay UK tax on your worldwide income and gains. Talk to us for advice on the recent changes to the law in Spain and the UK which might affect you. From 150€ Quill can create you a cast iron Will and/or low cost Shelter structure - which will protect you from the ravages of taxation - both in your home country and in Spain. Call us today, you will be glad you did!
Telephone Jenny Harris on +34 928 346 544 or +34 679 278 737 for information. read more online at www.quillwills.net A Quill Group Company
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Spanish Office: Calle Argentina 9, San Andres 108, Costa Teguise 35508, Lanzarote, Las Palmas, España Tel: +34 928 346 544, Fax: +34 928 346 540, Email: jenny@quillwills.net | www.quillwills.net