Recap of holiday home news: 1 December 2009
It’s time once again for our holiday home news round up, here’s what’s been happening:
Spanish tax refund for Britons - dailymail.co.uk
If you sold a holiday home in Spain in the past 12 years (from 1997 onwards) then you could be owed on average £13,500 by the Spanish tax authority.
The European Court of Justice has opened the door to this huge tax rebate for non-residents of Spain, by ruling that the tax regime was ‘unlawful and discriminatory’. While locals paid just 15 per cent in capital gains tax (CGT) on their profits when they sold, Britons and other non-residents were charged a hefty 35 per cent.
However, it’s not simply a case of filing a claim with the Spanish tax authorities. The complexities of the Spanish legal system make expert legal advice essential when trying to reclaim tax.
Tax allowances: 10 ways to beat the taxman
There may be four months to go until the new tax year, but there are several ways of ensuring that you take full advantage of your tax allowances. The times lists 10, but 2 in particular will be of interest to holiday let owners.
Transfer assets to a spouse who doesn’t work
If you earn more than £150,000 and your spouse doesn’t, transfer income-producing assets. Say you had a portfolio of holiday lets worth £500,000, which produced an income of 5% or £25,000 a year. If you were a high earner and held the investments in your own name, you would be liable for tax of £12,500 from 2010-11.
If you gifted these to a spouse who doesn’t work, the first £6,475 would be tax-free and the rest taxed at 20% — so just £3,705.
Holiday let tax changes
If you let your holiday home short-term, this is the final tax year in which you can offset expenses against income, so get any work done on the property before April 6.
What are the holiday letting tax rules on gites? – connexionfrance.com
Understanding your tax obligations when holiday letting can be taxing, especially when your house is in France.
According to The Connection, the taxation of rental income from furnished lettings has been thrown into considerable disarray this year. The confusion has arisen as a result of changes to the tax allowances for landlords of furnished accommodation.
As a small landlord in France, you can choose to be taxed on the basis of a notional profit, after deduction of a fixed standard allowance for costs, or on the basis of your actual profits, after deduction of your actual eligible expenses.
Although the article provides useful holiday letting tax advice for France, it’s always wise to consult professional tax advice.
A Place in the Sun Spanish Property Auction – aplaceinthesun.com
A Place in the Sun is staging its first ever Spanish property auction on 13th December 2009 at the Radisson SAS Portman Hotel, London.
Following price drops of 30-50% in recent years, Spain’s house-builders are keen to offload unsold holiday homes on the Costa Blanca, Costa del Sol, Costa Calida and Costa Almeria. Some of the lots are offered for sale with 50% discounts and in some cases – no reserve at all. All the properties are key ready.
The auction is free to attend and properties can be viewed online beforehand.
Halifax Empty Homes Survey
According to the latest Halifax Empty Homes Survey – homes that have been vacant for more than six months (because they are between occupants, undergoing modernisation, in disrepair or awaiting demolition) exceeded 300,000 in 2008 – a rise of 9% from 2007. The latest figures mean that 1.6% of privately owned properties in England were empty.
Furthermore, the Halifax said when homes unoccupied for less than six months were included in the total, the figure rose to 613,270.
Surely owners of these properties could capitalise on the demand for let properties and earn income, rather than leave them empty?