Latest news with #Socialists'
Local Spain
05-06-2025
- Business
- Local Spain
Even Spaniards: Who exactly would have to pay Spain's 100% property tax?
In late May, Spain's ruling Socialists confirmed their plans to introduce a 100 percent property tax on home buyers from overseas as a means of addressing the country's housing crisis. The measure was initially suggested by Prime Minister Pedro Sánchez in January, but what many believed was just political posturing at the time seems to be closer to reality now that the PSOE government has officially registered the proposal in the Spanish Congress (it will still require parliamentary approval). When it was first announced at the start of the year, nobody knew exactly how this 100 percent tax would work as there was no legal text to go on. Now that the proposal is in writing and available for all to see, we've been able to confirm that the 100 percent would be applied to the taxable base of the property (the value of the property) and is not a 100 percent tax on the existing property tax on second homes (ITP) as many wrongly assumed. The same doubts have arisen when it comes to who exactly would have to pay the tax. Is it just non-EU foreigners who don't reside in Spain? How about third-country nationals who live in another EU country? What about EU nationals who don't live in the EU? Now we know exactly who would have to pay this tax. The ruling Socialists' proposal reads: 'The State Complementary Tax on the Transfer of Real Estate to Non-Residents of the European Union is created.' 'This indirect tax will be levied on the onerous transfer of real estate located in Spanish territory and the creation and transfer of property rights in such assets to individuals and entities not resident in the European Union.' Excerpt from the Socialists' proposal stating which property buyers are subject to the 100 percent tax. Therefore, EU residency is the deciding factor rather than EU citizenship. As an example, a UK national who is a resident in Germany would be able to avoid the proposed 100 percent tax, but a German national who lives in the UK would have to pay it. In this sense, even Spanish nationals who don't live in the EU would have to pay the levy if they wanted to buy a home in their own home country. American and British nationals who live in Spain or any other EU nation would be exempt from paying the 100 percent tax, but if they live in either the US or the UK they would have to cough up double the amount to buy a second home in Spain.
Local Spain
14-02-2025
- Business
- Local Spain
Will the financial requirements for Spain's non-lucrative visa change in 2025?
The non-lucrative visa (NLV) is one of the main visas non-EU nationals use to reside in Spain. It's often referred to as the retirement visa, as you're not allowed to work if you have it and have to prove you have sufficient financial means to take care of yourself through passive income or savings. How much money you have to prove you have for the NLV is based on the IPREM. This is an index or threshold for government aid, whether it be unemployment, disability grants, school grants, certain subsidies for the purchase or rental of housing, legal aid, or energy subsidies. The IPREM in 2024 was €600 per month, €7,200 per year. NLV holders have to prove they have 400 percent of the annual IPREM for the first year, which amounts to €28,800. For every family member included in the residency application, it's an extra 100 percent of the IPREM, which is an extra €7,200 for the year. This means that a couple will need to prove savings or passive income of €36,000. When it comes to renewing the NLV for two years rather than the initial one, you have to double those amounts. That was the NLV's financial threshold in 2024, so how about in 2025? As things stand, the financial requirement for Spain's non-lucrative visa is the same in 2025 as it was in 2024. That's because the IPREM is only updated through Spain's General State Budget Law, and for that to happen the Spanish government has to get it through Congress. So will Prime Minister Pedro Sánchez get the new Presupuestos Generales (State Budget) approved for 2025 and with it a possible change to the IPREM and the financial requirements for the NLV? It seems unlikely but it can't be ruled out. Given the ruling Socialists' weak parliamentary position and their poor track record of passing new laws despite remaining in power, there's a high chance that the IPREM will stay the same this year. In fact, at the end of December 2024 the Spanish Cabinet approved the extension of the 2023 State Budget for a second year in a row, meaning that for now the same applies for 2025. That's not to say that it can't happen, but the Spanish premier would have to convince Catalan parties Junts and ERC to get the new State Budget voted in. For PSOE's junior coalition party Sumar, if there's no progress made by spring, it'll be too late for the State Budget to be updated in 2025. Politics aside, it's worth noting that the IPREM hasn't been updated that often since it was created in 2004, and has only increased by 30 percent since then. There were slight increases to it in 2021 and 2022, but not since, hence why the financial requirement for the NLV isn't increasing every year as is the case with the financial threshold for the digital nomad visa, which is tied to the minimum wage (SMI), and this is going up far more often. So to sum up, it seems very likely that non-lucrative visa applicants and those renewing it in 2025 will not see an increase in the visa's financial threshold.
