Property For Sale In Spain – What Is The Beckham Law?

New tax benefit for expatriates in Spain

The Spanish Government introduced this law in 2004 to boost the economy and attract new high-skilled professionals to move to Spain to work, so what better time is there to look for your new home for sale in Spain than now? The law, named after footballer David Beckham, offers tax benefits to any foreign workers who relocate and qualify.

Main Benefits

The law listed under Royal Decree-Law 687/2005 allows for the provision of a reduced income tax rate of 24% for the first six years that you are resident and working in Spain. This is lower than the general rate, which ranges from 19% to 45%. Once you have found your villa for sale in Spain, find work and start the process of becoming a resident. Ask your lawyer to help you apply for this benefit.

Criteria for applying for the Beckham Law

Firstly, it is important that you have not been a tax resident in Spain during the previous five years and that you are a highly skilled professional who will contribute to the Spanish economy. Your annual income can be at most 600,000 euros, and you must have a valid contract with a Spanish company and obtain your primary residence in Spain. If you haven't already bought a home but are now settling into your new job, this could be the perfect time to find a house for sale in Spain and start your new life. The law has recently been amended, so you must check everything carefully with your legal representative.

Tax Benefits

An even better reason to search for a property for sale in Spain if you can take advantage of Beckham's Law is that you will be exempt from Capital gains for the sale of Spanish property, interest, and dividend tax. You will also be able to take advantage of the reduced wealth tax for any assets you hold in Spain, and your employer will also benefit by being exempt from paying your social security payments for six months.

Which professions can benefit?

The professionals who benefit from this law and may want to seriously consider relocating and finding both work and an apartment for sale in Spain are researchers, scientists, technologists, and engineers. Executive managers and financial experts are also sought after, as well as athletes, artists, and entertainers. Employees of international organizations with a base in Spain can also apply.

Application

You will need an address in Spain to apply for your residency, and if you haven't bought yet, Hamiltons of London can help you search for properties for rental and sale. We can also suggest local legal representatives and attorneys to help you apply for residency and Beckham's law benefits. Applications are sent to the tax office, which also sends them the employment contract, proof of income, and residency status. If the tax office rejects your application, it is possible to appeal their decision. The law is valid for six years, but you can apply for renewal. The law only applies to those whom a company employs and not those who are self-employed, partly because they have more flexibility regarding other tax benefits. It may also be too complicated to administer. Your employment must have been agreed upon, and the contract must have been signed either before your arrival in Spain or within the first three months of your transfer to Spain.

Impact

The law is very successful, and many highly skilled professionals have been encouraged to relocate to Spain, contributing to the country's economic growth. At Hamilton's, we have seen an increase in high-value customers looking for luxury villas in Spain over the last few years.

Conclusion

Beckham's law offers large economic savings to foreigners starting their new lives in Spain after receiving an offer of work, which also puts them in a great position to buy property in Spain, thus boosting the economy even more. The great incentive is that you will pay a lot less tax, and it is something you should consider applying for to save large sums of money when starting your new adventure in Spain.