Taxes on Overseas Property
Spain
Spanish property taxes are based on the official price registered not on selling prices. You would expect to pay under 1% annually plus additional local taxes.
You should note:-
- Non residents appoint a Fiscal Representative to assist in dealing with tax affairs in Spain.
- Income accruing in Spain is subject to Spanish tax. This includes income from lettings. Tax is 25%.
- Spanish capital gains on sale at 35%.
- Value of foreign property added to English property on death to find value of overall estate.
- Calculation of Spanish inheritance tax is complex.
Do seek out advice and expertise in this area.
France
When you buy there are two main local taxes, the taxe d’habitation and the tax fancières. The latter a local tax based on theoretical rental of French realty. The former is a residential tax.
- Income tax payable on letting income;
- On selling capital gains will arise;
- On death inheritance tax.
Think carefully about your French inheritance situation and get clear written advice on this important topic before committing yourself to buy French realty. At the same time take advice about your UK or other estate, which can be affected by owning French realty.
Italy
If you buy your property as a private individual then you will pay a purchase registration tax. This may be 3 – 4% or 10% if a second home.
- No wealth or inheritance tax.
- Capital gains tax only payable for the first five years.
- Check the law of succession.
Portugal
- Personal income tax on income.
- Capital gains on sale at 40%.
- Inheritance tax can reach as high as 50%.
- Local taxes.
- Portuguese law of succession is not applicable if you have an English will.
If you are thinking of buying in any of these countries, do always seek legal advice and expertise and remember to consider making a will in the country of your purchase as well as an English will. We strongly advise that you seek our advice on all these issues.