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 Post subject: Taxes and fees during long term rent in Lanzarote
PostPosted: Tue May 19, 2015 6:41 pm 
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Joined: Tue May 19, 2015 6:29 pm
Posts: 4
Hello everyone,

We are currently looking at moving to Lanzarote within the next few months and i am trying to find out what needs to be paid on a monthly/yearly basis on a long term rent at a three bedroom villa.

We will not be working in Lanzarote

- Is there tax to pay on rental money from UK properties if tax is paid yearly within the UK?
- Is there council tax to pay out there if just renting? How much if so?
- What other fees/taxes are there to consider per month/year?
- How much is health insurance roughly? I know this depends on the individual
- Car insurance roughly?

Any other information would greatly help.

Many thanks for your time

Carl


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 Post subject: Re: Taxes and fees during long term rent in Lanzarote
PostPosted: Wed May 20, 2015 7:33 am 
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Joined: Thu Jun 14, 2012 7:30 am
Posts: 541
Good morning
to take your points and answer them depends on where you would ORDINARILY be resident
1) If you are resident in Spain (after 90 days you should apply for residencia) but not tax resident then you will continue to pay tax in the UK....however if you choose to be fiscally resident in Spain (ie reside here for more than 183 days per annum) then you will have to register with the ´´hacienda´´(tax office) and pay taxes here.If you own a property in the UK from which you derive an income or if you just own a property which exceeds the current tax threshold here. then you will have to declare this and pay tax on it ........in fact if you are tax resident in Spain you have to pay tax on your total world-wide income.
2) Council tax or IBI as it is known would normally be paid by your landlord unless there is a clause in your lease making you responsible for it......this varies from Ayuntamiento to Ayuntamiento and may or may not include your basura tax (rubbish bin emptying ) tax again normally paid by your landlord unless an exemption in your lease.
You will have to pay to register on the ´´empadron´´ but this is a nominal one off cost of around 2€ per person.
3) you will normally be responsible for water,electricity and gas bottles (if used) prices from a couple of hundred euros per month for all unless your lease specifies the cost is inclusive
4) Health insurance varies cosiderably depending on age and pre-existing conditions from around 40€ per person per month to as much as 400€ per person per month
5) Car insurance again varies on length of licence held, type of car, age of car and whether you hold a Spanish licence or not (again if you choose to be resident then you must convert your UK licence to a Spanish one....cost about 50€ and involves a medical and a series of reaction tests.)
Average insurance costs on one driver 1200cc 15 yr old motor is around 240€ to 400€ pa
All the above can be done by you (if you are sufficiently fluent in Spanish) or by paying a translator or gestor to do this .
Hope this helps


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 Post subject: Re: Taxes and fees during long term rent in Lanzarote
PostPosted: Wed May 20, 2015 7:59 am 
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Joined: Tue May 19, 2015 6:29 pm
Posts: 4
Thank you for the reply.

So to clarify

I will be living there for a few years so will have to register with the tax man in Spain?

Does this mean I pay tax on my over UK tax allowance and then pay tax in Spain too or would the UK one stop and would I then just pay talk on the worldwide income?

Thanks


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 Post subject: Re: Taxes and fees during long term rent in Lanzarote
PostPosted: Wed May 20, 2015 8:04 am 
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Joined: Tue May 19, 2015 6:29 pm
Posts: 4
Apologies, I had another question.

If you go back to the UK for a few weeks and live at an address there. Does that counter the 183 days residence in Spain?


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 Post subject: Re: Taxes and fees during long term rent in Lanzarote
PostPosted: Wed May 20, 2015 9:58 am 
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Joined: Thu Jun 14, 2012 7:30 am
Posts: 541
Hi
From what you say you would be classed as tax resident in Spain so would pay tax here as under UK/Spain dual taxation agreement you can only be resident and therefore taxed in one country......same applies for returning to the UK the period is 183 days in any one (rolling) year so you would have to return to the UK for a period of 183 days....a few weeks or even months does not count as your main residence would still be Spain,therefore your taxes would be due and paid here.There are exemptions as regarding government pensions if these apply you would be best advised to consult a dual taxation specialist as ignorance of the law here really is no defence and the tax man here is on a mission to reduce the shortfall as some have found out ...to their cost !


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