Property Tax
We can provide broad guidelines on the tax implications (VAT, CGT and IHT) implications of foreign property ownership but for more in-depth analysis we would put clients in contact with a tax expert for the country concerned.
Regarding the on-going tax implications of owning property abroad (eg income tax/property tax, wealth tax, rubbish tax etc.), you will need to appoint a local fiscal representative. Again we can help source this advice if desired.
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Caribbean
Our Caribbean properties lie on Margarita Island. Margarita is a tax free island therefore there are no associated tax costs for purchasing a property there.
Portugal
Property Taxes (Updated For 2007)
Property Transfer Tax (IMT) is applied by a sliding scale of bands and credits which rise in line with the price paid. For example, a 1% tax bill is applied to purchases below €85,500. Properties bought between €85,500 and €110,000 are liable to IMT at 2% minus €865. To simplify matters we have an IMT calculator for your use below.
For our IMT calculator 
click here
In addition to IMT and similar to UK stamp duty you will have to pay Acquisition Stamp Duty at 0.8% of the purchase price. Where a mortgage is attached to the property, there will be a Mortgage Stamp Duty at 0.04% of mortgage advance in the first year, followed by 0.5% in the next three years, followed by 0.6% of the sum outstanding in year five and afterwards.
Spain
Property Taxes
It is probably the last thing you want to do but one of the first things you should do after buying a property in Spain is to prepare to pay tax there. The reason is that, just as conveyancing law differs overseas, so do the fiscal statutes. Ignorance is no defence when determining how much tax must be paid and by whom. Failure to plan ahead could result in you paying more tax than necessary.
It makes sense to consult a professional adviser who speaks both Spanish and English. we at Your Place Abroad can recommend a range of tax advisors for you to choose from who can guide you through the Spanish tax system.
The UK tax implication of your property purchase abroad are best dealt with via your UK tax advisor (if you have one). Note, however, that the UK and Spain have a double-taxation treaty, so if you have paid CGT in Spain, this will be allowed for in the UK tax consumption.
In summary, allow for up to 10% of the purchase price in taxes and other costs (3% for conveyancing costs and legal fees and 7% IVA).
Capital Gains Tax (CGT)
Capital Gains Tax is a tax based on the gain you make over time on your property - in essence the gain is the difference between what you paid for the property and what you received upon the sale of the property.
Income Tax
A new Income Tax Law will be implemented for the resident tax payers in Spain from the 01/01/07. This law also introduces some important changes to the Income Tax Law for non-residents, to the corporation Tax returns and the Wealth Tax Returns.
Canary Islands (Tenerife)
Property Taxes
The Canary Islands are part of Spain and therefore belong to the European Union. Nonetheless, they have a specific fiscal system given their geographical location in relation to the rest of Europe.
Instead of charging IVA, as in mainland Spain, the tax is IGIC (Canaries´ VAT equivalent). A property purchased in the Canary Islands is subject to a 5% IGIC charge added to the deposit and final payments.
Morocco
In order to avoid any confusion it is recommended to seek the guidance of an independent tax expert, as the Moroccan taxation system can be pretty complicated.
When buying a Moroccan home you will need to budget for 2.5% registration tax, as well as 0.5% Notary tax. You will also be liable for annual local taxes (similar to our Council Tax), but these are relatively low. When you come to sell your property you will be liable for capital gains tax of 20 per cent unless it has been your principal residence for ten years. There is no such thing as inheritance tax in Morocco.
Turkey
Property taxes are paid each year on the values of land and buildings at rates varying from 0.1% to 0.6%. If you sell the property, a 1.5% levy is paid on the sales value by both the buyer and the seller.
Buildings and land owned in Turkey are subject to a real estate tax at the following rates:
- Residences 0.1%
- Other buildings 0.2%
- Land 0.1%
- Vacant land (but allocated for construction purposes) 0.3%
- Farming lands 0%
Municipalities are authorised to collect an Environmental Tax as a contribution towards the financing of certain services such as garbage collection. This tax is levied at scheduled fixed amounts that vary according to the location of the property.