Sell up or rent out?

Sorry I do not have a positiv answer. I rented out my property and had an agent to look after this. Because I lived not around there (1500KM) it was misused (rent was for a family of 4 according to the tenent their had "family visiting" and was occupied with 10, Another lot trashed it and I was left with 20.000 renovation cost....new bathroom (2), new kitchen, a hole in the wall to fit an electric stove....After 8 years of nightmers I sold it 

Oh my sounds horrendous, but thanks for responding 

We have rented out a house for 10 years before without major issues. Location and area will determine type of tenants. We said no smokers and no DHS, but pets were allowed. We are in same situation as hoping to move out permanently next year and rent out in UK again. Financially it makes sense, but take out insurance.

You need tax advice.

If you plan to rent in Spain for 6-12 months you will need to apply for Residency in Spain, and once you are here for >182 days you become tax resident (and you need to reconcile your income tax the following year).

If my memory serves me correctly, there is a check between the fiscal year in which you become tax resident in Spain and the fiscal year in which you sell your UK home. This determines whether or not you become liable for capital gains tax on your UK home. 

Get yourself a tax adviser in Spain.

Will60 is correct about timing your sale and becoming Spanish resident. If you sell in the first half of calender year and then move to Spain and become resident, ensure from the date you entered Spain to end of that year you have not been there more than 182 days. The 183 days you are deemed to be a fiscal resident and will pay CGT on the profit on your UK home. Even if say you sold in March, rent, stay with relatives, go on a long non Shengen area holiday, but dont enter Spain until after July then you are not fiscal resident. It wouldnt go from obtaining residencia(possibly some time later) but from enterring.

That year would not have to be declared but the next year would be your first fiscal year.

We are in similar situation but its definitely no selling Uk house as we need to refurbish , (been here 40yrs) move goods and get residency by December this year. As we wouldnt have the time (in Spain from March to June) and we,re 70yrs+ and know we want to return back to Uk when we cant drive, we will either keep it empty or rent it which is scary given other stories. It is expensive to keep empty but then its no differrent to what we,ve been paying out with Spain as a holiday home, instead Uk will be the holiday home but it would allow us to be in Spain when we want to and when we want to.

Good luck with your decisions and hope this helps you

Regards

Pauline.

Suddenly being poor doesn't seem so bad.

Don't forget that any asset including a house worth over 50,000 Euros must be declared to the Spanish tax man once you are tax resident. You will be charged for assumed rental income from a uk home even if you leave it empty. The 50k is for any group of similar assets, so say if you have a pension pot and bank savings that together amount to 50k plus that is one asset, property would be another group, a treasured old Rolls Royce and/or the odd Picasso yet another.

As has been said by others, do get good professional advice - 50k does not IMHO make you rich but still puts you in a different tax liability.

All figures are of course subject to revision by transition.

Thanks Peter I am aware of all that, but our savings could be reduced(ahem), our Uk imputed tax is no differrent to paying non res tax as we do at present and the rent on other will be taxed as it is in Uk at present. However we will take proper advice as we need proper calculations doing before we decide. We have found it difficult to find a tax advisor with english locally without a near 100km travel.

Regards

Pauline.

For every negative experience, I'm sure there are positives...

I own a holiday home in Murcia, so can't comment on the Spanish tax position (yet). However, I have been a tenant in the UK - rented a property twice when moving to a new area until I knew where I wanted to buy - similarly to what you're planning to do in Spain.

As the size of deposits to purchase properties has increased and, sadly, due to the increasing divorce rate, many more people in the UK are renting properties, for all sorts of reasons.

I am also a landlord and have been for 7 years. I would advise using a reputable letting agent, who will perform credit & reference checks on prospective tenants; and carry out regular visits to check that the property is being looked after. Fees will generally be one months' rent as a finder's fee and then 10%-12% of your rental income. Also get full landlord's insurance (I pay about £30 per month) and maintenance / breakdown cover for your boiler, plumbing, drains, etc. - peace of mind if there's a problem. You should declare your rental income for tax purposes, but you can offset a proportion of your costs (e.g. insurance payments, etc.) against your income. If you are still concerned, ask family / friends to keep a casual eye on the property.

There is an argument to stay renting in Spain and use your UK rent to pay for that - you keep a foot on the property ladder in the UK, in case you need / want to return; and you avoid the costs of selling and also the (horrendous) costs of purchasing a property in Spain.

If you do want to sell up, then make that clear to tenants up front - most will want a 1 year tenancy, so you can choose annually whether to renew - and it's only fair to manage their expectations - it might be your house, but it's their home while they're there.