The Spanish tax authorities grant a 15% tax relief on the investments used during any year for the acquisition of the primary residences. This amount is deducted on the calculations of Income Tax.

This is not applicable to non resident individuals and not enough of an incentive to become resident, or at least not the only one.

Our British friends see in this relief a reminiscence of the MIRAS, (mortgage interest relief at source) which was in place in the UK years ago.

The limit of allowable amounts paid is 9,015 Euros, to which 15% is applicable. Therefore the maximum tax relief available will be 1,352 Euros.

Raul Villanueva, accounting manager at www.konsilia.es inform us that new legislation has been published in the Spanish official gazette (B.O.E 19/12/07). The ORDEN EHA 3695/07 regulates the Form 030 to apply for the National Identification Number.

It is now clear that EU citizens who are not planning to establish their primary residence in Spain and will not stay for more than three months per year, are not obligated to obtain a NIE number (Numero de Identificacion de Extranjeros or Non resident tax identification number), neither at the Police Station nor the Spanish Consulate.

Those citizens, interested in opening a bank account, buy property or do other businesses in Spain where the tax identification is needed will be able to apply for a NIF ( Numero de Identificacion Fiscal) via internet.

This simplifies the process to obtain the NIE number that has become very laborious in the past months.

The new regulations are now in place and will need to wait and see how they are going to be implemented. At least there has been some progress here and we want to congratulate the Spanish Tax authorities for their response.

Published in 2005 by the Spanish Embassy in London and Dublin (ICEX), the book How to Buy your Home in Spain still offers sound advice on legal and tax matters. It is important to note that the tax information regarding Capital Gains Tax has changed and currently the rate is 18%.

Please read the article attached which includes the 2007 tax reforms in Spain.

Otherwise, at today’s date everything remains very much the same in the book. Contact Fernando@konsilia.es if any queries.

Please click here to download:

Book.- How to Buy your Home in Spain

Article.- Tax reforms 2007 in Spain

Also known as Beckham Legislation, as the former Real Madrid player benefited from this tax regime prior to moving to LA. This excellent tax regime for international executives moving to Spain provides a 25% flat income tax rate and exempts foreign income and assets for a five years period. Please read the article published in the Tax Journal (UK) under the title España Mañana