# Please help - renting out property tax nightmare- Help!



## Antonia (Apr 20, 2009)

I own a house in Spain. I have moved back to the UK because our business failed. I want to rent the property. I have just discovered that I will have to pay 24% of the rent I recieve to Hacienda. The mortgage is more than the rent we will be getting each month so this would effectively bankrupt me.
How can I get round this?
Please help, I am in tears.
Thankyou


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## jojo (Sep 20, 2007)

Antonia said:


> I own a house in Spain. I have moved back to the UK because our business failed. I want to rent the property. I have just discovered that I will have to pay 24% of the rent I recieve to Hacienda. The mortgage is more than the rent we will be getting each month so this would effectively bankrupt me.
> How can I get round this?
> Please help, I am in tears.
> Thankyou



Legally you should declare your rental income. I'm not sure that people do tho and I dont know what the penalties are if you're caught.

Maybe someone on here who understands things here will be able to offer you some advise


Jo xxx


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## Tallulah (Feb 16, 2009)

Antonia said:


> I own a house in Spain. I have moved back to the UK because our business failed. I want to rent the property. I have just discovered that I will have to pay 24% of the rent I recieve to Hacienda. The mortgage is more than the rent we will be getting each month so this would effectively bankrupt me.
> How can I get round this?
> Please help, I am in tears.
> Thankyou


Hi Antonia.

Regarding your situation, if you are now back in the UK legally as a resident, you would be declaring your worldwide income to the UK authorities. One assumes that the double taxation treaty would prevent you from paying tax to Hacienda on monthly rent, as you would not be declaring here as you are no longer resident in Spain.

Seems to me you need to talk to your UK tax advisor now you are back there.

Having said all that, things will probably be different when it comes to if you ever sell the property as Hacienda will then want their cut.

The good news is that now it's been sorted out by Brussels, you will pay the same as a Spaniard and not as a non-resident who used to pay a good deal more. 

Regards,

Tallulah.


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## Suenneil (Feb 17, 2009)

Hiya

Im not a tax expert at all, but one of my colleagues has just told me (he is a lawyer) that despite the fact you are no longer a resident in Spain, you still have an obligation to pay any taxes on the property together with taxes on the rental income - to the hacienda here in Spain. You wont pay the tax twice of course given the treaty between the UK and Spain, but it is income generated here so needs to be paid to the Spanish authorities - these are apparently classed as non resident taxes in these circumstances.

Remember that even if you had never lived here, or been classed as a tax resident, and just bought a holiday home that you used personally once a year ... you still have to have a NIE etc and be registered with the Spanish authorities for paying IBI and other property related taxes....

But please do get some proper expert advice if you are really concerned.

Sue :ranger:


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## Xose (Dec 10, 2008)

Antonia said:


> I own a house in Spain. I have moved back to the UK because our business failed. I want to rent the property. I have just discovered that I will have to pay 24% of the rent I recieve to Hacienda. The mortgage is more than the rent we will be getting each month so this would effectively bankrupt me.
> How can I get round this?
> Please help, I am in tears.
> Thankyou


Hi Antonia,
I would suggest you take a look at this :
Tax on overseas property lettings : Directgov - Money, tax and benefits

On the Spanish side things are not simple - are they ever?  There is information available on the Agencia Tributaria site, but the "Plain English" rule applied in the UK some time ago regarding legal matters has not been applied in Spain so that making sense of the information is difficult. A gestoria is therefore your best bet in finding out the definitive. Ideally, hacienda have a direct line and if your Spanish is good, speaking to them directly might be your best option. You will simply be finding out where the scenario stands in Spanish Tax Law and for that, you don't have to submit any personal information.

Good luck.

Xose


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