# Primary home (tax exempt?)



## expatlora1 (Jul 30, 2014)

Hi All,
Trying to find out as much information as possible, before we decide whether Spain is for us.

Is your primary home in Spain tax exempt? If 'yes' then, how many years is it exempt for? Are there any benefits to own a primary home in Spain i.e. tax exemption for 'x' years, or an open ended visa etc. or anything else you can think of? I think even if it wasn't tax exempt, the annual amount payable would be relatively small, so not really a bother to us, but always good to be informed upfront. 

Thank you for any help!


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## larryzx (Jul 2, 2014)

Sorry, but exempt from what tax ?


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## expatlora1 (Jul 30, 2014)

larryzx said:


> Sorry, but exempt from what tax ?


Hi! Property tax. In some EU countries, if you are resident and the house you purchase is your primary home, then you can get a property tax exemption for up to 7 years. It depends on what areas you live in i.e. urban, rural, the municipality you live in, price of the property etc.


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## Pazcat (Mar 24, 2010)

The only form of tax exemption/relief there is will be on CGT after a property sale and that depends on things like age and reinvestment in another Spanish property and you must be a Spanish tax resident and living in the property for a number of years. 

Not sure of the exact details.

If there is something else available like you mention I have no idea.


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## Alcalaina (Aug 6, 2010)

You pay purchase tax when you buy a property (like stamp duty) and you pay IBI (like council tax) to the town hall every year. AFAIK the only body exempt from these is the Catholic Church.


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## larryzx (Jul 2, 2014)

expatlora1 said:


> Hi! Property tax. In some EU countries, if you are resident and the house you purchase is your primary home, then you can get a property tax exemption for up to 7 years. It depends on what areas you live in i.e. urban, rural, the municipality you live in, price of the property etc.


I do not know what you mean by 'property tax'.

When you buy, everybody pays the 'purchase' tax, when you sell if resident you can roll over any gain into another home, if it is of higher value. 

Every one must pay town hall taxes, IBI etc (council tax), rubbish collection etc.


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## Chopera (Apr 22, 2013)

If you own a property in Spain and it isn't your main residence then it may also be subject to an imputed tax if you don't rent it out.


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## kitemonkey (Mar 25, 2015)

imputed tax? I'm doing a lot of research before coming over this winter to search from home to use for during the winter - not sure if we'd rent it out straight away but I've never come across this imputed tax - what is it and what kind of costs are involved if you have to pay??


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## snikpoh (Nov 19, 2007)

kitemonkey said:


> imputed tax? I'm doing a lot of research before coming over this winter to search from home to use for during the winter - not sure if we'd rent it out straight away but I've never come across this imputed tax - what is it and what kind of costs are involved if you have to pay??


You need to Google "imputed tax in Spain".

Basically, if you own a property in Spain but are not resident, then you are taxed on the actual or *potential *income (rent) that this property could generate. It's not much but is a percentage of your cadastral value.


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## Lynn R (Feb 21, 2014)

Pazcat said:


> The only form of tax exemption/relief there is will be on CGT after a property sale and that depends on things like age and reinvestment in another Spanish property and you must be a Spanish tax resident and living in the property for a number of years.
> 
> Not sure of the exact details.
> 
> If there is something else available like you mention I have no idea.


If the property was your habitual residence you are not liable for CGT if you reinvest the proceeds in another property in any EU country within two years, it doesn't have to be in Spain.


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## larryzx (Jul 2, 2014)

The OP is asking what happens in the case of a resident [ Primary home (tax exempt?) ] so imputed tax etc. is not relevant to the question


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## snikpoh (Nov 19, 2007)

larryzx said:


> The OP is asking what happens in the case of a resident [ Primary home (tax exempt?) ] so imputed tax etc. is not relevant to the question



... I was responding to post #8. My response makes it clear when and when one does NOT pay imputed tax.


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## Chopera (Apr 22, 2013)

larryzx said:


> The OP is asking what happens in the case of a resident [ Primary home (tax exempt?) ] so imputed tax etc. is not relevant to the question


In reply to the OP you asked


> Sorry, but exempt from what tax ?


 and I suggested that one of the taxes you are exempt from on your primary residence is the imputed tax. It's a bit difficult to know what is relevant to the OP because the question was a bit ambiguous.


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## StevejR1 (May 21, 2013)

Lynn R said:


> If the property was your habitual residence you are not liable for CGT if you reinvest the proceeds in another property in any EU country within two years, it doesn't have to be in Spain.


I did not know that. I knew about the reinvesting within two years, but I did not realise it applied to all EU countries. So if you were to sell up in Spain and return to the UK there wouldn't be any capital gains tax on the amount paid on your new home?


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## extranjero (Nov 16, 2012)

StevejR1 said:


> I did not know that. I knew about the reinvesting within two years, but I did not realise it applied to all EU countries. So if you were to sell up in Spain and return to the UK there wouldn't be any capital gains tax on the amount paid on your new home?


There wouldn't be CGT on the home you had just SOLD in Spain, providing you filled in the appropriate box on the tax form which is for your intention of reinvesting the proceeds in a new property.
I presume if you only reinvest part of the sale proceeds you will pay a proportion of the Cgt on the profit for the remaining sum.


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## expatlora1 (Jul 30, 2014)

I'm not talking of CGT. I was referring to property tax -- after a property is bought to live in as a primary residence, you would normally have to pay a monthly municipal tax, garbage, sewage etc. In some EU countries, you are tax exempt for a few years from paying any of these monthly taxes. Once your tax exemption is up, you then start paying 3-7 years down the line. I've gathered that Spain does not have these allowances for primary homes.


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## extranjero (Nov 16, 2012)

Would be nice if they did! 
Shouldn't think they have these allowances for any homes, let alone primary


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## snikpoh (Nov 19, 2007)

expatlora1 said:


> I'm not talking of CGT. I was referring to property tax -- after a property is bought to live in as a primary residence, you would normally have to pay a monthly municipal tax, garbage, sewage etc. In some EU countries, you are tax exempt for a few years from paying any of these monthly taxes. Once your tax exemption is up, you then start paying 3-7 years down the line. I've gathered that Spain does not have these allowances for primary homes.


As stated previously, you have to pay IBI, Basura and in some places an ECO tax. All of these are annual and there is no exemption (that I know of) even if the property is empty.


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## Lynn R (Feb 21, 2014)

snikpoh said:


> As stated previously, you have to pay IBI, Basura and in some places an ECO tax. All of these are annual and there is no exemption (that I know of) even if the property is empty.


Not every municipality has a separate charge for Basura (rubbish collection, for the OP) - mine doesn't, for one, we just pay the IBI.

Some (but by no means all) Ayuntamients have a discount scheme (usually only small, 5 or 10%) for people who meet various criteria, most often for those who are empadronamiento (on the official list of residents in the municipality). My Ayuntamiento introduced a discount scheme when catastral values were revised a few years ago, as a result of which I pay just over 40% less than the full amount of my IBI bill. Sometimes there are "extra" discounts - last year, for example, the Diputación de Málaga funded a 10% reduction in the IBI bills for the owners of all properties in municipalities within Málaga province which had a catastral value of below €100,000.


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