What about investing in property to create a tourism or leisure business?
In 2018, according to the National Statistics Institute (INE), 82.8 million people visited Spain, and their average spend increased from that of 2017.* The tourist arrival figures broke records for the sixth year in a row, so against this background you would think investing in the industry would be a no-brainer.
However, the truth is rather more complex, as, unless you know the lie of the land, your long-dreamed-of cooking, yoga, writing or detox retreat, may struggle to turn a meaningful profit. This is not to say that you should not invest, only that you should perhaps discuss your plans with a wealth manager to see whether there might be better ways to utilise your investing power.
Property and Wealth Tax
It is important to remember that if property ownership results in the total value of your assets exceeding €700,000 (Spanish-only assets for non-residents, worldwide for residents) you will be liable for wealth tax of between 0.2% and 3.5%.
Although there is €300,000 main home allowance, any additional homes you own in the UK or elsewhere could mean that there is little financial sense in also investing in Spanish holiday let property.
Quite simply, property ownership in Spain may not be the most flexible and tax efficient way to manage your wealth. Instead, you should speak with a local and bilingual financial adviser in Spain about the best way to realise your financial goals.
Financial Advice in Spain
Blacktower Financial Management (International) Ltd. has more than thirty years’ experience helping its clients achieve their financial and retirement goals.
From our offices in Spain we are able to help our expat clients successfully manage their wealth and cross-border tax affairs.
For more information contact us today.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Let’s face it: Brexit is a confusing time for everyone. However, it is important that panic doesn’t set in. This applies at every level, from the uppermost echelons of government and business leaders to expatriate workers and the everyday retiree.
Some of the most confusing and complex areas for any UK expat to decipher are their tax obligations, in both their new home country, and their country of origin. Should you be paying tax on foreign income? Is there any kind of foreign residence tax exemption? How can I get a residence tax definition? It’s a labyrinthine subject, and one that merits the help of a financial professional, but it’s good to be forearmed with a basic grasp of the subject before you do so. If you are liable to pay UK tax you will be expected to file a tax return, failure to do so or not doing so in good time, can result in penalties and even interest payments on monies owed.