# Rajoy's latest brilliant idea



## extranjero (Nov 16, 2012)

Selling your house?
Moving back to UK?
Hurry up-Señor Rajoy wants to remove the exemption from cgt that state pensioners, tax resident and have lived in their house forvover three years have enjoyed, as a "perk " of being a resident.
Plans to do this from April next year.


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## larryzx (Jul 2, 2014)

I usually accept that if *they* want to change the rules then its up to* them*. But with this latest 'reform' which will hit foreign owners, who are more likely to sell up and maybe then rent, using their capital to support their lifestyle in their old age, than Spaniards who probably keep their property until they die.

Well done Spain. Just keep going and you will kill the goose eventually, or maybe even sooner.


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## extranjero (Nov 16, 2012)

Sorry, it's January next year, not April, even less time to plan!


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## Alcalaina (Aug 6, 2010)

I do wish people would include links to the source when posting this sort of thing. It's not that difficult surely? All I can find in the reports on the latest fiscal reform is that pensioners selling their homes will be exempt from paying the plusvalia and can invest the money in their pension pot instead.

Los mayores de 65 años no tributarán por venta de activos si lo destinan a pensión


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## larryzx (Jul 2, 2014)

There is a report here:--- RTN South Edition 773

I do not know if that where Extranjero got the info which inspired his post.

I have seen the info in a few places, but cannot guarantee if any of them was accurate.


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## extranjero (Nov 16, 2012)

There does seem to be confusion talking about cgt as if it were plus valia.
Now if plus valia were to be abiolished- good idea!
Yes, sorry, should have referred to RTN today.


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## Alcalaina (Aug 6, 2010)

larryzx said:


> There is a report here:--- RTN South Edition 773
> 
> I do not know if that where Extranjero got the info which inspired his post.
> 
> I have seen the info in a few places, but cannot guarantee if any of them was accurate.


Thanks Larry. The reform is related to the article I posted; in future pensioners will only get the tax break if they buy another property or invest in the new pension scheme. It doesn't seem at all clear-cut though, particularly on the issue of primary vs secondary residence.


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## extranjero (Nov 16, 2012)

Alcalaina said:


> Thanks Larry. The reform is related to the article I posted; in future pensioners will only get the tax break if they buy another property or invest in the new pension scheme. It doesn't seem at all clear-cut though, particularly on the issue of primary vs secondary residence.


I thought secondary residences didn't get this exemption, so surely it must be the primary, which would be very mean


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## larryzx (Jul 2, 2014)

extranjero said:


> I thought secondary residences didn't get this exemption, so surely it must be the primary, which would be very mean


Requirements are: Tax Resident, over 65, three years in residence of the principle home, then no CGT on that property.


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## extranjero (Nov 16, 2012)

larryzx said:


> Requirements are: Tax Resident, over 65, three years in residence of the principle home, then no CGT on that property.


Until next year!


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## Lynn R (Feb 21, 2014)

Alcalaina said:


> I do wish people would include links to the source when posting this sort of thing. It's not that difficult surely? All I can find in the reports on the latest fiscal reform is that pensioners selling their homes will be exempt from paying the plusvalia and can invest the money in their pension pot instead.
> 
> Los mayores de 65 años no tributarán por venta de activos si lo destinan a pensión


My Ayuntamiento is, this year at any rate, only charging 50% of the plus valia due on the sale of any property. Applies to everybody, not just pensioners. How long it will last, I don't know.


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## Lynn R (Feb 21, 2014)

According to this article published in Cinco Dias today, under the fiscal reform over 65s who sell their principal residence will still be exempt from capital gains tax (and it also refers to the plus valia changes referred to in the article Alcalaina linked to:-



Qué hacer antes de la reforma fiscal y qué dejar para después | Economía | Cinco Días

This is the relevant paragraph:-
Si un contribuyente tiene 65 años o los cumplirá en breve debe tener en cuenta que la reforma fiscal incluye una nueva exención para las ganancias patrimoniales. Actualmente, los mayores de 65 años ya están exonerados de tributar por los beneficios obtenidos al vender su vivienda habitual y ello seguirá igual. Sin embargo, otras plusvalías como puede ser la recuperación del dinero aportado a un fondo de inversión o la venta de acciones bursátiles, hoy tributa en la base imponible del ahorro. A partir de enero, los mayores de 65 años no deberán tributar por ese beneficio con la condición de que el dinero obtenido lo destinen a una renta vitalicia.


The amount of capital gains tax paid by others who sell houses purchased many years ago, however, will increase substantially.

Looks like this is yet another example of the British expat press getting something spectacularly wrong, and their audience being only too ready to believe it. When will they learn?


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## extranjero (Nov 16, 2012)

Lynn R said:


> According to this article published in Cinco Dias today, under the fiscal reform over 65s who sell their principal residence will still be exempt from capital gains tax (and it also refers to the plus valia changes referred to in the article Alcalaina linked to:-
> 
> 
> 
> ...


I prefer your version!
Can you explain the plus valia changes, please


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## larryzx (Jul 2, 2014)

Lynn R said:


> According to this article published in Cinco Dias today, under the fiscal reform over 65s who sell their principal residence will still be exempt from capital gains tax (and it also refers to the plus valia changes referred to in the article Alcalaina linked to:-
> 
> 
> 
> ...




I think that says it will not be taxed if it is used to purchase an annuity.

I think it was the press that got it right. But correct me if my Spanish is not up to it.


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## Lynn R (Feb 21, 2014)

larryzx said:


> I think that says it will not be taxed if it is used to purchase an annuity.
> 
> I think it was the press that got it right. But correct me if my Spanish is not up to it.


The article says that the exemption from tax on the "ganancias patrimoniales" (capital gain) for over 65s selling their habitual residence will continue - "y ello siguira igual".

The change comes in relation to "otras plusvalias" which, as you say, will not be charged in future if the amount which would have been taxable is invested in an annuity to increase their pension income.


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## CapnBilly (Jun 7, 2011)

I have to say that at this stage I cannot see these changes in the law. Capital Gains is part of Ley 35/2006. The draft tax legislation does not currently include any changes to the section on exemption for over 65 on the sale of their main residence. This may of course change.


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## larryzx (Jul 2, 2014)

Lynn R said:


> - "y ello siguira igual".
> .


I think that means "It will change". 

But I hope you are right


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## xabiaxica (Jun 23, 2009)

larryzx said:


> I think that means "It will change".
> 
> But I hope you are right


surely the opposite?

it will continue the same


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## Lynn R (Feb 21, 2014)

xabiachica said:


> surely the opposite?
> 
> it will continue the same


Exactly. Thank you.


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## baldilocks (Mar 7, 2010)

Lynn R said:


> Looks like this is yet another example of the British expat press getting something spectacularly wrong, and their audience being only too ready to believe it. When will they learn?


Don't they always! Just like the rubbishy tabloids in UK, USA or anywhere else. They need shocking headlines (even unsubstantiated ones, or even those irrelevant to the article) to encourage people to take their rags or, worse still, buy them. The stupidity of some people.


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## Lynn R (Feb 21, 2014)

baldilocks said:


> Don't they always! Just like the rubbishy tabloids in UK, USA or anywhere else. They need shocking headlines (even unsubstantiated ones, or even those irrelevant to the article) to encourage people to take their rags or, worse still, buy them. The stupidity of some people.


I just wish, when someone has taken what these rags have to say at face value, and plastered the false information all over every expat forum they can find, along with a lot of anti-Spanish invective, that once the information has been shown to be false they would put a fraction of the same effort into posting messages saying "ok I was wrong" and contact the publications who put this false information out in the first place to ask them to print a retraction.


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## baldilocks (Mar 7, 2010)

Lynn R said:


> I just wish, when someone has taken what these rags have to say at face value, and plastered the false information all over every expat forum they can find, along with a lot of anti-Spanish invective, that once the information has been shown to be false they would put a fraction of the same effort into posting messages saying "ok I was wrong" and contact the publications who put this false information out in the first place to ask them to print a retraction.


Please watch out for porcine fæcal matter from above, if it ever happens.


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## Lynn R (Feb 21, 2014)

baldilocks said:


> Please watch out for porcine fæcal matter from above, if it ever happens.


I suppose it would make a change from having it flung at us, third hand, via our computer screens.


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## extranjero (Nov 16, 2012)

This article was on the front page of the RTN, and seen by thousands. Whether they believe it is up to them Do you think every article should carry a warning, saying, "Don't believe all you read, we might have got it wrong!" Seems to be a case of don 't shoot the messanger. Seeing a headline like this, naturally people will wonder what the reaction of others is, and prompt discussion, opinion, and hopefully, facts.
Few people are going to examine the original Spanish documents. for many, ex pat press is the main way of finding out what is happening in Spain, as accountants, solicitors, financial advisors often give conflicting information.
Even now, we don't actually know the final outcome of these discussions on changes to taxes.
Yes,I do think the RTN should have done their research and reported more accurately, and I am going to contact them
However, I shouldn't have to add to my original post " Take this with a pinch of salt!"


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## Alcalaina (Aug 6, 2010)

Sadly, I think people DO need to take articles in the expat press with an unhealthy amount of sodium chloride. They are notorious for reprinting each others' material without checking the veracity. The main priority of their staff is to sell advertising, not carry out investigative journalism.

Not saying your intentions weren't honourable, extranjero, but it is one of the reasons I asked about the source ... then those forum members who are able and willing to check the original Spanish documents can inform the rest of us.


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## Chopera (Apr 22, 2013)

larryzx said:


> I think that says it will not be taxed if it is used to purchase an annuity.
> 
> I think it was the press that got it right. But correct me if my Spanish is not up to it.


So it seems that just as the UK government is waking up to the rip-off annuity scam that pension companies have been running for decades, Spain now wants to encourage people to buy into them through tax breaks?


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## baldilocks (Mar 7, 2010)

Alcalaina said:


> Sadly, I think people DO need to take articles in the expat press with an unhealthy amount of sodium chloride. They are notorious for reprinting each others' material without checking the veracity. The main priority of their staff is to sell advertising, not carry out investigative journalism.
> 
> Not saying your intentions weren't honourable, extranjero, but it is one of the reasons I asked about the source ... then those forum members who are able and willing to check the original Spanish documents can inform the rest of us.


The trouble is the average expat that comprises the readership of these rags have a poor command of Spanish and are, therefore, dependent upon them for news about or from Spain.


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## Lynn R (Feb 21, 2014)

baldilocks said:


> The trouble is the average expat that comprises the readership of these rags have a poor command of Spanish and are, therefore, dependent upon them for news about or from Spain.


And that they continue to have blind faith in what they read therein, in spite of it having been pointed out to them innumerable times how unreliable they are. Because they're British, I suppose - which is the reason why so many end up being overcharged and ripped off by their fellow countrymen/women when they arrive here.


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## extranjero (Nov 16, 2012)

baldilocks said:


> The trouble is the average expat that comprises the readership of these rags have a poor command of Spanish and are, therefore, dependent upon them for news about or from Spain.


Bit of an assumption don't you think?


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## Lynn R (Feb 21, 2014)

extranjero said:


> Bit of an assumption don't you think?


Extranjero, here's a suggestion (and it is only a suggestion, feel free to ignore it if you wish, of course).

Next time you read a report of this nature in the RTN or some other such publication which alarms you, why not put a post on a forum with a heading more like "Is this true?" rather than "Rajoy's latest brilliant idea" - which implies you believe it and are being sarcastic about it - then say something along the lines of "I've just read xxxxx in the xxxxxx. Can anybody tell me if this is really the case, because if so I'm very worried about it".

I just think people need to avoid immediately jumping to the conclusion that the Spanish Government are out to get us and steal all our money. Find out the real facts of the situation first.


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## extranjero (Nov 16, 2012)

Lynn R said:


> Extranjero, here's a suggestion (and it is only a suggestion, feel free to ignore it if you wish, of course).
> 
> Next time you read a report of this nature in the RTN or some other such publication which alarms you, why not put a post on a forum with a heading more like "Is this true?" rather than "Rajoy's latest brilliant idea" - which implies you believe it and are being sarcastic about it - then say something along the lines of "I've just read xxxxx in the xxxxxx. Can anybody tell me if this is really the case, because if so I'm very worried about it".
> 
> I just think people need to avoid immediately jumping to the conclusion that the Spanish Government are out to get us and steal all our money. Find out the real facts of the situation first.


As I said, don't shoot the messenger !


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## larryzx (Jul 2, 2014)

extranjero said:


> As I said, don't shoot the messenger !


Charles Svoboda, a member of campaign group AUN which fights for the rights of property owners and the environment is quoted on this in RTN at:- 

Pensioners lose tax break.

NB I make no comment. So I also say, please don't shoot the messenger


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## Lynn R (Feb 21, 2014)

Another detailed explanation of the changes to be introduced regarding capital gains:-

La exención por plusvalías de los mayores de 65 años, hasta 240.000 euros | Economía | Cinco Días

And the most relevant point in the context of this thread is this:-


"Es cierto que actualmente ya existe una exención para los mayores de 65 años en el caso de venta de su vivienda habitual. Este beneficio se mantiene y, en este caso, no resulta necesario reinvertir la ganancias en una renta vitalicia."


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## xabiaxica (Jun 23, 2009)

Lynn R said:


> Another detailed explanation of the changes to be introduced regarding capital gains:-
> 
> La exención por plusvalías de los mayores de 65 años, hasta 240.000 euros | Economía | Cinco Días
> 
> ...


translated :

"It is true that there is already an exemption for those over 65 years in the case of sale of their residence. This benefit is maintained and, in this case, it is not necessary to reinvest the proceeds in an annuity''


so NO CHANGE


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## Lynn R (Feb 21, 2014)

xabiachica said:


> translated :
> 
> "It is true that there is already an exemption for those over 65 years in the case of sale of their residence. This benefit is maintained and, in this case, it is not necessary to reinvest the proceeds in an annuity''
> 
> ...


Exactly - so the RTN's alarmist headline "Pensioners to Lose Tax Break" is completely, utterly, hopelessly wrong.

Extranjero has posted on here previously (because she read it in some expat paper) that IVA would be going up as part of the fiscal reform. I posted at the time (with links to) several announcements made by Government Ministers that despite the recommendations made by the Committee of Experts, the EU and the IMF that they should increase it, they would not be doing so. What happened - it was announced, with certainty, that IVA will NOT go up next year.

Another matter she has posted about is a so-called exit tax to be introduced, which the expat paper she read said would affect British pensioners selling their houses and going back to the UK. It had to be explained by other forum members that this measure will in fact only apply to high net worth individuals (over €4M) and those disposing of large shareholdings in Spanish companies after they have declared themselves non-resident.

And then of course there was the coverage in the expat papers of Modelo 720, encouraging British expats to believe they were being specifically targeted, that hundreds of thousands of people would be receiving draconian fines which could wipe out their savings.

Do people not see a certain pattern emerging here (and it's been going on for years, it's not a recent thing) that the expat papers print sensationalist and alarmist stories, completely misrepresenting the facts, and then the things they have worried people to death about never materialise? Yes, there are some awful things which HAVE happened to people, like those who bought properties believing they had all the correct licences but then had them declared illegal retrospectively, or those who have fallen prey to conmen of one sort or another. But making things up and propagating completely misleading information is just not on.


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## xabiaxica (Jun 23, 2009)

Lynn R said:


> Exactly - so the RTN's alarmist headline "Pensioners to Lose Tax Break" is completely, utterly, hopelessly wrong.
> 
> Extranjero has posted on here previously (because she read it in some expat paper) that IVA would be going up as part of the fiscal reform. I posted at the time (with links to) several announcements made by Government Ministers that despite the recommendations made by the Committee of Experts, the EU and the IMF that they should increase it, they would not be doing so. What happened - it was announced, with certainty, that IVA will NOT go up next year.
> 
> ...


it is a dreadful shame that expat newspapers write such alarmist stories - or sometimes alarmist headlines - but the articles aren't quite what the headline suggests

I know the guy who wrote that RTN article incidentally - & I'm surprised he got it so very wrong - he's usually better than that - I'd love to know what his sources were


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## baldilocks (Mar 7, 2010)

xabiachica said:


> it is a dreadful shame that expat newspapers write such alarmist stories - or sometimes alarmist headlines - but the articles aren't quite what the headline suggests
> 
> I know the guy who wrote that RTN article incidentally - & I'm surprised he got it so very wrong - he's usually better than that - I'd love to know what his sources were


Quite probably another expat media source. They tend to reprint each other's juiciest sounding stories in order to not get left behind in the readership statistics.


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## extranjero (Nov 16, 2012)

I 've seen inaccurate info given on here too, so perhaps everyone posting on here should refer to the actual piece of relevant Spanish legislation before touching the keyboard. They won't though.
Time and again someone has put incorrect information, only to be corrected by the experts, but they haven't received the slating that I have! Anyone could have posted as I did, and no doubt that RTN article was read, worried about, and repeated to others by the thousand.
Blame the RTN, and other papers of its ilk, but don't have ago at me!
With regard to the expat press, there are often articles by well known firms of financial advisors and even they have had to be corrected at times.
Since advice given to expats by accountants and solicitors is often flawed, who the hell can we trust?


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## baldilocks (Mar 7, 2010)

extranjero said:


> With regard to the expat press, there are often articles by well known firms of financial advisors and even they have had to be corrected at times.
> Since advice given to expats by accountants and solicitors is often flawed, who the hell can we trust?


With those you have to single out (and perhaps ignore) the advertorials which are more common than one might expect.


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## Alcalaina (Aug 6, 2010)

baldilocks said:


> The trouble is the average expat that comprises the readership of these rags have a poor command of Spanish and are, therefore, dependent upon them for news about or from Spain.


There are far more reliable news sources which those who don't read Spanish can use. El País in English, for example, or Typically Spanish if they want something more expat-focused.


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## ddrysdale99 (Apr 3, 2014)

Are there many people who have made a lot of Capital Gains on their properties?


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## Alcalaina (Aug 6, 2010)

ddrysdale99 said:


> Are there many people who have made a lot of Capital Gains on their properties?


Good point - most people these days are having to sell for much less than they paid.


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## extranjero (Nov 16, 2012)

Alcalaina said:


> Good point - most people these days are having to sell for much less than they paid.


Most, unless they are desperate, have made a decent profit where I live, albeit, not as much as they would have wished; then of course there are estate agents fees, plus valia, etc etc, so in the end there may not be much of it left!


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## Alcalaina (Aug 6, 2010)

extranjero said:


> Most, unless they are desperate, have made a decent profit where I live, albeit, not as much as they would have wished; then of course there are estate agents fees, plus valia, etc etc, so in the end there may not be much of it left!


What is the CGT based on? The net gain after all these things have been paid?

Given the number of properties that were deliberately undervalued at the land registry in order to avoid tax when they were purchased, I can't feel too sorry for these people really.


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## mrypg9 (Apr 26, 2008)

Alcalaina said:


> What is the CGT based on? The net gain after all these things have been paid?
> 
> Given the number of properties that were deliberately undervalued at the land registry in order to avoid tax when they were purchased, I can't feel too sorry for these people really.


Some immigrants seemed to think Spain would be a goldmine...buy cheap, sell dear. They speculated and lost. They didn't make the profit extranjero says they hoped for.
My heart bleeds.
The moral of the tale:never take at face value anything you hear from the expat/ immigrant press or on expat/ immigrant forums without checking from reputable sources. Do you believe what you read in the Daily Mail?
As Alca says, read the 'informed' English press.
Or learn Spanish.


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