# Election of Main Residence



## superslim (Feb 14, 2014)

Anyone know if it is possible to change your main residence for tax purposes in Spain by election? Am considering buying another property which we would like to be our main residence for tax purposes, but can envisage it taking a while to sell our current place. If we buy a place now can we change our election of main residence from our current property to the new one? (I envisage we would spend our time between the two but probably live a greater proportion of the time in the old property until it sells). Not too worried about tax on the 'gain' on the existing property as there probably won't be much of one


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## snikpoh (Nov 19, 2007)

superslim said:


> Anyone know if it is possible to change your main residence for tax purposes in Spain by election? Am considering buying another property which we would like to be our main residence for tax purposes, but can envisage it taking a while to sell our current place. If we buy a place now can we change our election of main residence from our current property to the new one? (I envisage we would spend our time between the two but probably live a greater proportion of the time in the old property until it sells). Not too worried about tax on the 'gain' on the existing property as there probably won't be much of one


No, you can't!

If you spend more than 183 days in Spain in any one calendar year OR if your centre of economic interest is in Spain, then you are considered tax resident in Spain.

... and that's about it.


Sometimes you can be caught between a rock and a hard place trying to satisfy all these rules - in that case, the various tax offices will decide for you. 


If you spend more time in one of the properties, then surely that is your 'main residence' - how can you think it might be some where else?


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## superslim (Feb 14, 2014)

Sorry Snikpoh, I think you have misunderstood my question.

We ARE tax resident in Spain, legally registered and pay tax here.

I am talking about having 2 properties in Spain and whether I can elect (and change) which is my main residence for tax purposes. It is possible to do it in the UK, I don't know whether it is possible to do it here, hence my question. We are not looking to do anything 'dodgy' or try to hide under the radar, just to use legitimate tax planning measures.

Please read questions carefully and don't jump to conclusions when answering. Thanks



snikpoh said:


> No, you can't!
> 
> If you spend more than 183 days in Spain in any one calendar year OR if your centre of economic interest is in Spain, then you are considered tax resident in Spain.
> 
> ...


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## Chopera (Apr 22, 2013)

superslim said:


> *Anyone know if it is possible to change your main residence for tax purposes in Spain by election?* Am considering buying another property which we would like to be our main residence for tax purposes, but can envisage it taking a while to sell our current place. If we buy a place now can we change our election of main residence from our current property to the new one? (I envisage we would spend our time between the two but probably live a greater proportion of the time in the old property until it sells). Not too worried about tax on the 'gain' on the existing property as there probably won't be much of one


Are you saying you already live in Spain but want to live somewhere else in Spain, without selling your current residence (for the time being at least)?


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## xabiaxica (Jun 23, 2009)

Chopera said:


> Are you saying you already live in Spain but want to live somewhere else in Spain, without selling your current residence (for the time being at least)?


if that IS what he is saying then as far as tax is concerned it doesn't make any difference, AFAIK, which property is his tax residence

tax is nationally set, isn't it?


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## 90199 (Mar 21, 2010)

We have two properties here in the Canary Islands, for tax purposes one is mine the other is Bosslady's. The tax office here in Valverde did this for us a few years ago.

Go and enquire at your local Spanish tax office, ours is most helpful.


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## extranjero (Nov 16, 2012)

Hepa said:


> We have two properties here in the Canary Islands, for tax purposes one is mine the other is Bosslady's. The tax office here in Valverde did this for us a few years ago.
> 
> Go and enquire at your local Spanish tax office, ours is most helpful.


So what happens in regard to Cgt if one is sold?
Presumably you are both living together in one property, so if you sold the unoccupied one, you not be eligible for the concession of no cgt tax resident, over 65 and lived in the main residence for 5 years? 
Or do you do what the MPs in the UK do- flipping?


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## superslim (Feb 14, 2014)

As I understood it, you get an inflation allowance against the tax payable on the gain element, on the sale of your main residence in Spain. This being the case, if I have two properties in Spain it could make a difference which one I elect to be my main residence. In tax terms here in Spain, we are under the regimen that treats all our assets as jointly owned. I just wondered if anyone knew whether it was possible to change your election of main residence from one Spanish property to another (Spanish property).

Not trying to be clever or difficult with the question, just thought this would be a regular topic on a forum such as this and that there would be a few of you who had been through the same thought process.


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## superslim (Feb 14, 2014)

extranjero said:


> So what happens in regard to Cgt if one is sold?
> Presumably you are both living together in one property, so if you sold the unoccupied one, you not be eligible for the concession of no cgt tax resident, over 65 and lived in the main residence for 5 years?
> Or do you do what the MPs in the UK do- flipping?


I assume they operate under the tax regimen that treats their assets separately, therefore no need to 'flip'.


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## 90199 (Mar 21, 2010)

extranjero said:


> So what happens in regard to Cgt if one is sold?
> Presumably you are both living together in one property, so if you sold the unoccupied one, you not be eligible for the concession of no cgt tax resident, over 65 and lived in the main residence for 5 years?
> Or do you do what the MPs in the UK do- flipping?


Watif and Butif, I used to give presentations, these two Russian fellows always appeared.

One is for sale, we shall have to wait and see……………………..


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## extranjero (Nov 16, 2012)

Hepa said:


> Watif and Butif, I used to give presentations, these two Russian fellows always appeared.
> 
> One is for sale, we shall have to wait and see……………………..


So if Your wife's property is for sale does she claim it as her main residence, over 65, lived there for 3 years etc, if she has been actually living with you in yours
Or is it regarded as a holiday home, so you pay the full CGT? 
What did your tax adviser say, when he gave you tax advice?


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## 90199 (Mar 21, 2010)

extranjero said:


> So if Your wife's property is for sale does she claim it as her main residence, over 65, lived there for 3 years etc, if she has been actually living with you in yours
> Or is it regarded as a holiday home, so you pay the full CGT?
> What did your tax adviser say, when he gave you tax advice?


The situation you quote is hypothetical, and as such I am not inclined to discuss the same.


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## extranjero (Nov 16, 2012)

Hepa said:


> The situation you quote is hypothetical, and as such I am not inclined to discuss the same.


I am just interested to know what the advice was from the tax office, that was so advantageous regarding putting the properties into each of your names.
How would it benefit you?


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## extranjero (Nov 16, 2012)

What is the point of making a post that you can't explain to others on the forum?


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## littleweed (Sep 20, 2013)

Hi,
I think your official tax residence is called "domicilio fiscal". This can changed with the modelo 30 form obtainable from Agencia Tributaria web site. The form is very simple. If you google 'modelo 30 spain', there is a lot info on this.


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## extranjero (Nov 16, 2012)

littleweed said:


> Hi,
> I think your official tax residence is called "domicilio fiscal". This can changed with the modelo 30 form obtainable from Agencia Tributaria web site. The form is very simple. If you google 'modelo 30 spain', there is a lot info on this.


Surely your main residence is the one you are living in .
If you have another property, how can you choose that one as your main residence? 
I know the UK MPs do it all the time, flipping.


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## superslim (Feb 14, 2014)

This seems to be a contentious topic, sorry that wasn't my intention.

In the UK, individuals who own 2 (or more) properties which they occupy at some time or other have the right to choose which property is their main residence for tax purposes. This election has to be made within 2 years of buying the property but once made, it can be switched between your properties as you see fit. The reason people do this is to reduce their liability to CGT on a 2nd home on the sale of the property. It is a legitimate tax planning tool in the UK. The rules have recently changed in the UK and from April '14 the benefit of switching your main residence for tax purposes around is less than it was, although the ability to vary it still exists. NB The election of a main residence for tax purposes in the UK is NOT dictated by which property you spend most of your time living in.

Thanks littleweed for the info on modelo 30 form. We set up our tax regimen when we moved to Spain to suit our circumstances and have no wish to change this status, although it is useful to know that it can be done.

If anyone knows whether it is possible to change the election of main residence by Spanish residents between properties owned in Spain, I would be grateful for any information. Thanks


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## extranjero (Nov 16, 2012)

Seems a bit like the tax avoiding celebrities, it's legal but there's a fine line between tax avoidance and evasion!


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## Chopera (Apr 22, 2013)

It's an area I've wondered about but not looked into. If you move house you usually empadronar (register) at the new property and i'd have thought that is equivalent to choosing your (new) main residence. Maybe hacienda has a form to fill out as well, but I'd have thought the "point of reference" is where you are empadronado.


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## superslim (Feb 14, 2014)

Chopera said:


> It's an area I've wondered about but not looked into. If you move house you usually empadronar (register) at the new property and i'd have thought that is equivalent to choosing your (new) main residence. Maybe hacienda has a form to fill out as well, but I'd have thought the "point of reference" is where you are empadronado.


I think you are right Chopera, almost certainly you would expect to be on the padron at your main residence. Anyone living in an area habitually should be on the padron - whether you own a property or live with family or rent - so in itself it probably doesn't provide the only determining factor. I'll continue to research.


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## superslim (Feb 14, 2014)

extranjero said:


> Seems a bit like the tax avoiding celebrities, it's legal but there's a fine line between tax avoidance and evasion!


I would call it "tax planning" rather than "tax avoidance" extranjero, and the important part of your sentence is that it is legal. There's a big hue and cry at the moment about high profile people arranging their affairs to avoid or offset tax - actually I think rather than harassing the individuals concerned people should put their efforts into lobbying the tax authorities to close loopholes. Let's not be too censorious extranjero, after all many people adopt measures in order to pay less tax. For instance, the ISA savings schemes in the UK where people can save or invest money and receive interest (or a gain) tax free - completely legal -
but another form of organising one's finances to save (or avoid paying) tax. What about people who employ someone to do a job for them and pay them 'cash in hand' - it avoids having to pay VAT on the service and essentially saves on paying a tax. Now that isn't strictly legal. Or the counterparty to that transaction who pockets the cash and doesn't declare those cash earnings in his annual return - another example of someone avoiding the payment of tax due, and not legal.

So let's not moralise about people taking the legal permitted measures to manage their financial affairs.


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## Allie-P (Feb 11, 2013)

There seems to be various, legal ways of avoiding tax in the UK. For instance, I have a wealthy pensioner relative living there - who is in receipt of several large pensions.

He 'confided' in me, during his last visit, that it has all been set up - so he pays not a penny of tax !!

He omitted to tell me _how _!!

My only income is a government pension which is taxed at source in the Uk - plus my state pension.

Why do these legal loopholes exist? Surely, it breeds resentment....


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## superslim (Feb 14, 2014)

I agree Allie-P. People like the facilities that taxation provides and expect access to good services but most people don't want to pay (or pay so much) for them - hence the perennial problem in many western countries of tax dodges/avoidance schemes/creative accounting/loopholes or however you want to refer to it. Since in a democracy politicians are dependent on voter support the most influential groups of people often get the more generous treatment. Nothing really new there! But many people avoid paying tax if they can and in various ways, right across the socio-economic spectrum. For example, the practise here in Spain where houses are routinely sold to a buyer at one price and another price declared to the tax authorities is a way by which both buyer and seller avoid paying the full tax charge. It has been a widespread practice, with estate agents, solicitors, notaries and other officials complicit in it. It is tax evasion however. Resentment seems to occur when one person's getting a benefit someone else isn't, not I'm afraid that tax avoidance is a bad thing per se. It seems to me it's just one of the unattractive traits we humans have.


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