Ecovis in Luxembourg
Auditors, accountants, tax advisors in Luxembourg
International tax, audit, accounting and legal news
Buying property in Spain after Brexit: Real estate in the Canary Islands02.06.2023
The Canary Islands is one of the most popular destinations in Spain for foreigners for buying a holiday or retirement home, or even a primary residence. After Brexit, the question often arises as to how the process has changed from both an immigration and taxation perspective. Ecovis expert Natalia Bonilla answers the most important questions.
Ms Bonilla, can people still buy a property in Spain after Brexit?
Of course, everyone can buy property in Spain regardless of their citizenship and whether they are from the EU or not. For the British, the purchasing process remains the same after Brexit.
How long can people stay in the property for?
For 90 days in a period of 180 days, without any need to obtain a tourist visa. For longer periods, British citizens are required to obtain a regular residence visa.
Which visa options are available for Britons wishing to stay for periods exceeding 90 days?
There are different visas covering different personal circumstances: a non-lucrative residence visa (for people who do not plan to work in Spain and have sufficient financial means and full-cover health insurance), a “Golden Visa” (a suitable option for investors, for example those investing EUR 500,000 in real estate, allowing the holder the possibility to work in Spain), a digital nomad visa, etc.
We will be happy to advise you on legal and tax issues relating to the purchase of real estate in Spain or questions on residence permits.Natalia Bonilla, laywer, partner, ECOVIS Legal Spain – Canary Islands, Spain
What is seen as “sufficient financial means”?
This is linked to an annual index (IPREM), so it changes slightly every year. For 2023, the amount is set at EUR 2,400 per month (EUR 28,800 per year) for the permit holder and EUR 600 per month (EUR 7,200 per year) for each family member accompanying the permit holder.
Is there any possibility to obtain a permanent residence permit?
Of course. The visas referred to above have a limited initial duration (1 to 3 years), but all of them can be renewed for subsequent periods of 2 to 5 years depending on the type of permit. After 5 years of continued residency in Spain, it is possible to obtain a permanent residence permit.
What are the main tax implications?
While nothing has changed in relation to the taxation related to the purchase, there has been an increase in the rate of non-resident income tax (IRNR), triggered by the possession (imputed income) and exploitation of the real estate, from 19% to a 24%.
For further information please contact:
Natalia Bonilla, lawyer, partner, ECOVIS Legal Spain – Canary Islands, Spain
Real estate France: New declaration to be filed by 30 June 2023 at the latest01.06.2023
Taxpayers must submit the occupancy declaration for residential premises by 30 June 2023 at the latest. If the deadline is missed, there is a penalty of EUR 150 per building. The new tax obligation applies to natural and legal persons. The Ecovis experts know the details that owners must consider.
Since 1 January 2023, housing tax has been abolished for all principal residences and for all taxpayers. However, it still applies in the case of second homes and vacant premises. Consequently, owners are subject to a new reporting obligation set out in Article 1418 of the French Tax Code (FTC), relating to the occupancy of French residential real estate i.e., houses, apartments, garages, carparks, cellars. Failure to declare, as well as the omission or inaccuracy of the information provided, are subject to a tax fine of EUR 150 per property (Article 1770 terdecies of the FTC). Once submitted, this declaration must only be updated if there is a change to the details.
Which owners are concerned?
- Individuals: owners, joint owners of real estate, a usufructuary
- Legal entities: any kind of companies or entities (trust included) owning residential premises
What information must be declared?
- The terms of occupation of the premises (personally, by third parties)
- The nature of the occupation: main residence, secondary residence, rented premises, premises occupied free of charge, vacant premises (unfurnished and unoccupied)
- The identity of the occupants (natural person: surname, first name, date of birth, place of birth / legal person: name, identification number)
- The period of occupation (or vacancy) of the premises(s) they own (beginning, end of the period of occupancy)
- In the case of seasonal rentals: the beginning of the seasonal rental period and the terms of the property management (self-managed, or under rental contract with manager), the SIREN of the manager or that of the owner if applicable, the possible classification as furnished tourism
- The monthly rent amount is optional for the time being
If you need assistance in meeting this new obligation, please contact us before 30 June 2023.Vanessa Raindre, Tax partner, MD Legal, Paris, France
How to declare?
- For individuals, the declaration shall be made through their personal account on impots.gouv.fr under the section “manage my real estate”
- For legal entities, the declaration shall be made on their professional account (warning: this requires opening, beforehand, the service “manage my real estate”)
Normally, the properties that are subject to the filing requirements are shown on the website www.impots.gouv.fr. If not, the taxpayer must inform the tax administration. Filing the declaration also provides an opportunity to check whether the information held by the tax administration on a property is correct: nature and address of the property, batch number, precise location (building, staircase or entrance, level, door), cadastral references, surface, number of rooms etc.
For further information please contact:
Vanessa Raindre, Tax partner, MD Legal, Paris, France
Apostille China: How companies can legalise their certificates in China in the future31.05.2023
From 8 November 2023, companies in China will be able to have documents that they want to use abroad certified faster and more easily. The Ecovis experts in Germany and China explain the details.
Good news for companies. From the end of this year, the process of certifying documents will be a lot more simple. This includes essential public documents for opening a company and liquidation. Application processes are expected to become 90 percent faster than in the past, when they could be a nerve-racking and time-consuming procedure of great significance for foreign businesses in China.
What is the Apostille Convention?
The Hague Convention of 5th October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents, or “Apostille Convention”, is an international treaty simplifying the authentication process of public documents for use in foreign countries. It has been ratified in over 120 countries worldwide.
In practice it means that if member A issues a public document, it can be used for legal purposes in member B through an apostille from a relevant authority designated by the issuing country.
Our colleagues at ECOVIS Ruide China in Shanghai will be happy to provide you with the certifications you need.Richard Hoffmann, Lawyer, Ecovis Heidelberg, Germany
Why has China joined the Convention and what is the current process?
The Chinese Ministry of Foreign Affairs states that this will facilitate international trade and heavily reduce the time and cost involved. It is estimated that the process will become up to 90 percent shorter.
This is the current process for the authentication of a German certificate / public document:
In future, the complex and expensive legalisation requirements will be exchanged via an apostille.
How foreign companies can benefit
Notarial acts or attestations are essential when setting up companies or closing them down, for litigation, commercial register extracts, patents etc. These and more are all covered by the convention, as well as documents for the day-to-day operation of companies involved in cross-border businesses such as import-export. Normally, the accreditation and legislation process could take up to 3 months. Crucial documents for opening companies and liquidation took a long time to legalise and often came with problems along the way (documents being declined etc.). However, from November it should only be a couple of working days. Moreover, foreseeable deadlines will bring more stability for lawsuits and litigation. The changes are expected to provide great benefit to foreign businesses.
For further information please contact:
Richard Hoffmann, Lawyer, Ecovis Heidelberg, Germany