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New legislation to declare income and assets abroad

On 1 October 2018 the British HM Revenue and Customs (HMRC) department  introduced a new legislation called “Requirement to Correct (RTC)”.  This will require UK taxpayers declare their foreign income and assets to the HMRC .

Therefore, from the 1st of October 2018, for those who fail to pay the relevant tax by this date, there will be higher penalties on their foreign income and assets.

About offshore income and assets

As the HMRC defines:

“Income is considered to be an offshore income as it comes from a territory outside the United Kingdom, which includes:

  • Interest from overseas bank and building society accounts
  • Dividends and interest from overseas companies
  • Rent from overseas properties or if you rent out your UK property whilst living in another country
  • Wages, benefits or royalties earned outside of the UK”.

Included taxes

The RTC legislation would apply to:

  • Income tax
  • Capital gains tax
  • Inheritance tax

Some offshore activities that may involve paying tax

These activities must be declared to HMRC:

  1. Renting property abroad
  2. Transferring income or assets from one country to another (including Channel Islands, Isle of Man, the EU or any other

What should you do?

In case there is UK tax due on foreign income or gains, or tax on UK income transferred abroad, you should tell the HMRC .

To get 90 additional days you can use the  HMRC’S Worldwide Disclosure Facility.

To read more about the new legislation you can take a look at the  official guidance or for a more in-depth explanation you can download the official brochure.

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Valencia – House Hunting and the Market Overview…………………..

The coastal province of Valencia is cheaper and more manageable than Spain’s major metropolises, making it an appealing alternative for many home buyers.

Spain’s residential market has been on a gradual rebound since around 2012, when luxury properties began to recover following the global recession.

During the financial crisis that began in 2008, home prices fell 30 to 35 percent across the country, she said, noting that they have since risen by about 8 percent overall, although prices in Madrid and Barcelona have recovered more rapidly.

The recovery is expected to continue, with the International Monetary Fund predicting that Spain’s economy will outperform those of Germany and France in 2018. In Valencia, third-quarter sale prices averaged about 1,900 euros a square meter (or about $200 a square foot) this year.

Old Town, a historic neighborhood known for its winding streets, Central Market and medieval cathedral, is one of the most popular areas with tourists and foreign buyers. A typical two-bedroom apartment there sells for around 300,000 euros (or about $340,000), while a two-bedroom penthouse in a fully restored building can go for around 500,000 euros ($565,000).

Foreign buyers are also interested in seaside properties,  although they often prefer the beach areas just outside city limits, where more property is available and there is more new construction. While prices vary depending on location, a two-bedroom apartment in these areas generally goes for 250,000 to 500,000 euros ($280,000 to $565,000).

For foreign buyers, the appeal of Valencia — Spain’s third largest city, with a population of roughly 790,000 — lies in its affordability and manageable size relative to Madrid and Barcelona, as well as the access to a historic city center and Mediterranean beaches.

“You can get from one side of the city to the other in 15 minutes, and for people who don’t want the typical holiday resort, this has more of a cultural and elegant feel.”

Foreign buyers account for roughly 10 percent of all sales in Valencia, according to the Registrars in Spain.

The country’s Golden Visa program grants non-Europeans “the fast-track right to residency” if they invest at least 500,000 euros ($565,000) in real estate.

There are no restrictions on foreign buyers in Spain. But buyers from outside the country are strongly advised to work closely with a real estate agent and a lawyer who will perform the necessary due diligence.

Taxes and fees, including legal fees and the 10 percent transfer tax, typically amount to around 15 percent of the sale price. The real estate agent’s commission in Valencia is usually 4 to 5 percent, and is split between buyer and seller. There are also other combinations….

Mortgages are available to foreigners, although typically not for more than 70 percent of the sale price, and less than that for investment properties. – Villas Valencia can assist. Just let us know what you are looking for as we only charge 3 %.

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Want to live longer? Valencia, Spain is the town, country to move to……………

Spain is set to overtake Japan as the country with the longest life expectancy, according to a study.

By 2040, it will have an average lifespan of nearly 85.8 years, moving it from fourth place to the top of the table, and beating Japan’s average lifespan of 85.7.

Singapore is projected to be third (85.4 years), followed by Switzerland (85.2 years); Portugal and Italy (84.5 years); Israel (84.4 years); France (84.2 years) and Australia and Luxembourg (84.1 years).

The average lifespan in the UK is expected to rise slightly from 80.8 years to 83.3, jumping from 26th place to 23rd.

Overall global life expectancy is forecast to increase by 4.4 years for both sexes by 2040, according to the study published in The Lancet.

The world’s two largest economies have differing fortunes, with China rising from 69th to 39th in the rankings (81.9 years) and the US dropping from 43rd to 64th (79.8 years).

In Latin America and the Caribbean, Bolivia, Dominican Republic, Brazil, and Panama are all forecast to add at least three years.

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Spain’s holiday rental laws

According to the Tourist Movement on Borders agency, Frontur, Spain received 13.7 million international visitors during the first quarter of 2018, a 6% increase on 2017 figures. With 1.4 million visitors choosing to stay in holiday rental accommodation, a healthy increase of 7% year-on-year, and that’s just the official figures. Taking into account that many short stay homes remain unregistered in Spain, we expect the actual figure to be much higher.

It’s been five years since the Spanish government excluded holiday rentals from the LAU (Ley Arrendamientos Urbano) and delegated the task of regulating the industry to its 17 regional governments. There are only a couple of the 17 autonomous communities that as yet haven’t regulated holiday rental accommodation. Find out the latest status in our region…:

VALENCIAN COMMUNITYIs it regulated? Yes under the original Decreto 92/2009 which was updated in 2015 Decreto 75/2015
Since: July 2009, with the last amendment in May 2015
Essentials: Owners must wait until they have registered to start rental activity, and have to start renting within two months of registration.
Points to watch out for: If you manage five or more properties you must register as a Tourist Company. Further applications for registration in the districts of Ciutat Vella are suspended, whilst the government discuss the protection of environment and culture in the area.
To register your property: Download the application forms and present your Declaración Responsable at a local tourism office, online with an electronic signature or at the post office. Owners must also now get permission from their local town hall before they can register.
Documents required: Property escritura (title deed), First Occupation Licence, passport or DNI (national identity card), company escritura if you are registering as a rental management company.
Note: Registration codes for private owners start VT and managers and businesses EGVT. Followed by a code for each province.
The Valencian government have produced an excellent guide for holiday rental owners to help them get registered


UNREGULATED REGIONS

In regions where regulations have yet to be introduced, owners should still be able to rent out their property for short-term accommodation under the original LAU (Urban Tenancy Act), as long as there has been no ruling to exclude holiday rentals. In this case, it is not permitted to advertise the property anywhere – on or offline – as tourist accommodation.

A legal contract must be prepared for every guest. We recommend you check with a legal representative for your region.
Holiday rental regulations are changing frequently across the regions. It’s advisable to check for updates with your local tourist board.

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Spanish Holiday Rental Taxation for non-resident Landlords

The beginning of 2018 saw fresh changes to the way in which buy-to-let landlords are being taxed in Spain. Not paying your taxes is no longer an option – you could be facing huge fines, when the Spanish Tax Office (AEAT) finds out you are letting your property, whether you are resident or a non-resident landlord, and fail to report your rental income. A tax advisor or accountant will be able to tell you, just how much you can save in tax with the latest changes in taxation rules. Broadly speaking, the changes are these:

You will qualify for landlord tax relief, if you are a resident of the EU or wider EEA area. You must attain a tax residency certificate from your home country, to prove that you are tax payer in that country, and a non-resident landlord in Spain. Why?

On 1st January 2018, the Common Reporting Standard, of CRS, came into force in Spain. More than 100 countries in the EEA singed up to the CRS agreement in an effort to reduce tax evasion. In essence, there will now be an automatic exchange of fiscal information between these countries on individual taxpayers.

The United Kingdom and Spain have both signed up to CRS, which means that both countries’ tax authorities will be automatically aware of your taxable rental income. If your rental income is derived from Spain, that’s where you will be taxed. Your Spanish bank should have written to you at the start of the year with a request to disclose your tax information. Not doing so could result in the closure of your account.

Whether you rent out your Spanish property directly to holiday makers or let it via tourist sites like Airbnb, the Spanish tax authorities are now in a position to find out and fine you heavily, if you do not report your taxable rental income. The American giant Airbnb was finally forced to sign an agreement with the Spanish tax authorities, and similar tourist accommodation websites are also forced to sign such an agreement, as the Spanish Tax Office is cracking down on illegal lettings, and passed a new law on holiday lettings intermediaries, which came into effect in June this year. Such intermediaries are now forced to report to the tax office on property identification, landlord’s rental income from the days let out etc. If the letting intermediaries fail or refuse to report, they can be fined up to 600,000 euros.

In an effort to discover landlords who fail to report their rental income, tax authorities now regularly trawl tourist accommodation websites with specially designed software, as well as places like Facebook and other social media sites, where private landlords advertise their holiday rentals.

With the help of an accountant or tax advisor/lawyer, you should be able to reduce your non-resident landlord tax bill by at least 40%, if not more.

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Spain…..Positive news for the Spanish House Market

Prime property sales in Spain’s key cities and sales in resort areas have been key drivers  in the first half of 2018. Prime sales increased by 27 per cent year-on-year.  Meanwhile, key second home destinations such as Marbella, the Costa Brava, Valencia and Ibiza all saw significant growth compared to the same period last year.’

 

‘Properties above €1.5 million and new homes are selling particularly well. Northern European buyers have been the most active with French and British buyers accounting for over 50 per cent . We are currently looking at a number of high-end projects in the area as demand for turnkey homes, particularly from foreign buyers, grows year by year.’

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British expats have been urged to ensure that their tax affairs are in order

British expats have been urged to ensure that their tax affairs are in order as

HM Revenue & Customs escalates efforts to target those who live abroad.

The taxman has massively stepped up the use of EU laws designed to increase

co‑operation between tax authorities. Experts say this is accelerating after the

amount of tax HMRC collected from people living overseas trebled in just a year.

This is part of a wider push on tax avoidance by the Government, which has

reduced the estimated amount lost from £4bn in 2011-12 to just £1.7bn in 2016-17.

Now the tax office is casting its gaze across the Channel.

In 2017 it made 1,006 requests to foreign authorities, resulting in the recovery of £5.7m in tax….

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………………Universal Health Care………..

By Gwynne Dyer

            Nothing is perfect, and that definitely includes health care. On the 70th anniversary of the first full-coverage national health care system that is ‘free at the point of delivery’, Britain’s National Health Service, English people have been marching in the streets demanding better funding for the NHS, and Donald Trump naturally got the wrong end of the stick again.

             Back in February, as part of his war against Barack Obama’s attempt to improve the coverage of the rudimentary US health care system (‘Obamacare’), Trump claimed that the marchers were protesting because the British system is “going broke and not working.”

             It’s tough trying to defend the existing US system when every other developed country provides universal health coverage for its citizens, but Trump battled bravely onwards, later tweeting that the Democrats in the United States “want to greatly raise taxes for really bad and non-personal medical care.” Like the British allegedly suffer under the NHS.

             In fact, the English National Health Service (Scotland and Northern Ireland have separate but similar systems) is, in former Conservative cabinet member Nigel Lawson’s words, “the closest thing the English have to a religion.” It is almost universally loved, and the protests were about government under-funding of the NHS.

             Even the Conservative government that has strictly limited funding increases for the NHS over the past seven years, despite rising demand due to an ageing population, has now been forced to yield to popular demands. Prime Minister Theresa May announced last week that the NHS would get a funding increase of 3.4% per year over the next four years, giving it an extra $27 billion annually by 2023.

             But are the English right to love their health-care system – and are the French and Germans and Russians and Japanese and the people of almost every other developed country right to revere their own similar systems? The United States may be the odd country out, but it does spend far more on health care than anybody else.

             The United States spends 16% of its entire Gross Domestic Product on health care, almost twice as much as the average (8.2% for Japan, 8.4% for the UK, 8.5% for Australia, 10.4% for Germany). In theory, that ought to mean that Americans are healthier than everybody else and live longer. In practice, it’s just the opposite.

             The United States is the only developed country where the average life-span is less than  80. In fact, it’s barely 78 years in the US, whereas everywhere else it’s in 80-82 range. The US also has the highest ‘preventable death’ rate of any developed country, and the highest infant mortality rate by a very wide margin. Americans spend more on health, and get less back, than anybody else.

             They also spend far more of their time worrying about health care. The principal cause of personal bankruptcies in the United States is ‘catastrophic’ health emergencies, and all but the very rich have to devote much time to finding affordable medical insurance. Elsewhere in the developed world, nobody really thinks about that. The care will be there when you need it, and nobody goes bankrupt.

             The model that was pioneered by Britain’s NHS on July 5, 1948 has been so successful that it is now spreading into many developing countries as well. India is still a poor country, but its National Health Policy 2017 goals include a commitment to “progressively achieve Universal Health Coverage.” China is working to provide affordable basic healthcare to all residents by 2020. And so on.

             Attitudes change over time. In the 1930s nobody thought that there was some sort of basic human right to health care. The well-off paid for their own, and the rest depended on charity (which wasn’t very dependable). What changed that attitude was the Second World War, a time of great national solidarity and sacrifice in every country.

             It was the worst war in history, but it produced a generation who believed that the people who had shared in the sacrifice (in both the countries that won and those that lost) must not be left behind in the peace that followed.  The will was there to do new and great things, and they did them.

             It is no coincidence that the same year of 1948 saw the signing of the Universal Declaration of Human Rights, which said (among other things) that “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services.”

             The world had turned, and what had been a privilege became a right. One that is still widely abused or neglected, of course, but it has nevertheless spread across the entire planet in the past 70 years. Why did the United States miss out?

             The answer is probably a free-market ideology so strong that it enabled the insurance companies and the medical profession (which opposed the idea of a national health system in every country, at least initially) to win the political battle in the US and strangle the idea in its cradle. It keeps coming back even there, but for the moment Americans must go on paying the costs of their ideology.

 

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Valencia (Spain): Best European City to Buy Property in 2018

An Independent Company specialized in International Real Estate services, sees 5 top opportunities for American investors to buy property in Europe.

Here is the ranking of the 2018 survey:

1. Valencia (Spain)

2. Paris (France)

3. Berlin (Germany)

4. London (United Kingdom)

5. Venice (Italy)

Reasons to choose Europe

1: The strong current US Dollar to Euro exchange rate. American buyers can expect a positive outlook if choosing to invest in European Real Estate.

2: Geo-political stability throughout Europe and market performance benefits.

3: European cities are best known and appreciated for their culture, history and cuisine.

4. Excellent standard of living as well as an opportunity to amplify investments in real estate.

As a result, European real estate purchases made by American citizens have increased since last year (UK +2.6%, Spain +2.5%, France +2.4%, Italy +1.9% and Germany +0.85%).

Valencia

Valencia has seen an increasing presence of foreign buyers after its market crisis. With relevant capital inflows, infrastructural projects have since been under development, selling for an average price of $195/sq. ft., half that of those in Madrid and Barcelona. The percentage of foreign investors on overall real estate transactions in the central area of Valencia is more than 30%, 18.2% higher than 2017.

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• Valencia’s competitive property prices attract investors

Spain’s third city is now seeing steady gains and attracting investors following the fall of its property prices and the number of sales transactions during 2007’s property crisis.

Its latest market data shows property sales transactions in Q1 2018 increased by 20% more than the same period in 2017, while the number of foreign buyers increased from 10% in Q1 2017 to 33% in the same period this year.

Property prices in Valencia are currently less than half of those in Barcelona and Madrid on average, reaching €1,743 per square metre by Q1 2018. Prices in Barcelona were at €4,334 per square metre, and prices in Madrid reached € 3,540 per square metre during the same period.

Prices in Valencia have since then picked up, showing an annual growth rate of 13%. The districts most popular among foreign buyers – Eixample and El Pla de Real – saw price rises of 10% and 13% respectively.

Valencia’s growing appeal is confirmed by recent government figures. The Spanish Registrars Association (Registradores) revealed that in 2017, 10% of total sales completed in Valencia were made by foreigners, compared to 6% in Madrid 9% in Barcelona.

Valencia’s manageable size appeals to foreign buyers, along with the beaches to the north-east of the city where the mix of apartments and townhouses with communal pools and play areas make them popular with families.

For those familiar with the city and its recent development, the current buzz surrounding it comes as no surprise. It is now a growing hub for business and innovation and home to leading companies such as Ford, BP, Mercadona and Caixabank.

Communications with the rest of the country and Europe are excellent – you can arrive in the centre of Madrid in less than an hour and a half on the AVE fast speed train whilst recent data shows that Valencia airport arrivals are up by 19% year-on-year to April 2018 with Italians, Germans and the British making up the biggest proportion.

The property recovery has been slower in Valencia than in Spain’s other two cities, he expects to see a noticeable change in the pace of the market over the next few years due to the increasing demand for and supply of new homes.

“Modern homes not only make an ideal primary or secondary residence but are also a great long-term and rental investment. Some of these homes could attract a rental yield of between 5% and 6%.

It will only be a matter of time until Valencia becomes as internationally known as Barcelona and Madrid.

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Spain’s Bouncing Back

Spain’s Bouncing Back

 

We’ve become aware of increasing demand for properties in Spain over the past few months as we are now receiving one or two enquiries a day (much lower than the 2007 peak but higher than the 2012 low). Most of these are for Valencia area… and the coasts.
Please do let us know if this market interests you.

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The value of your H O M E

You want to increase saleability, improving your property always would be a good investment and add value. Here are 10 home improvement tips..:

  1. Redecorate and make simple upgrades
  2. Makeover the kitchen
  3. Add or update bathrooms
  4. Garden appeal
  5. Are the windows up to scratch
  6. Does the layout of your home work
  7. Replace or spruce up tired-looking doors
  8. Would a loft conversion solve space issues
  9. Be energy efficient
  10. Consider creating a driveway

…because spring finally in the air and for some home owners it’s time to start thinking about redecorating or even putting their property on the market, as the new selling season gets under way.

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About Us

Villas Valencia offers properties in Valencia at Spanish prices. What`s more, we don`t charge the buyer (as most other agencies do). We are an English locally run estate agent company dealing with properties in a picturesque area around the city of Valencia.

Testimonials

You are the only agent we dealt with your knowledge of the area and the buying process left us at ease that everything would be taken care of. - Mr & Mrs P, in Naquera

Your advice was clear and brilliant. You completely understood our requirements and objectives, facilitating our new purchase. Thank You! - Mr L, Now living in Lliria

You offered a great service from start to finish, clearly explaining all our options and helping speed everything through. You translated everything we needed quickly.

- Mr T, Second home in Montroy

Villas Valencia was fantastic and exceeded my expectations. I will and have recommended you to others. Thank you for all your referrals for building work. We love our new pool! - Sean, house in Rocafort

Thank you for all the help buying our property in Valencia. With so much to think about, you explained everything well and made it all very easy. Cant wait to move out there fully and enjoy a G & T on our balcony with you.

- Ben, house in Naquera

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