Making the decision to buy or invest in real estate abroad is an issue that should not be considered lightly, especially if this involves changing tax residency. While there are several advantages that this type of operation brings to those seeking to diversify their assets in a country other than Colombia, it is also true that it is an operation that must be done very carefully.
I bring up this issue because during the more than seven years that I have been advising foreigners, especially Colombians, on their real estate investments in Spain (through Doxa), this is one of the points that has most marked the negotiations and the final decision-making. However, with total certainty, I can tell you that this is one of the best European countries to live, make real estate investments and establish tax residency.
In addition to the quality of life offered by Madrid, Barcelona, ??Malaga and Valencia, among others, Spain also has very attractive opportunities for both property appreciation and profitability through leasing, which makes property purchase a profitable long-term strategy. This becomes an advantage for Colombians who are also thinking about changing their tax residency in light of the difficult situation in the country, the legal uncertainty for investors and the heavy tax burden that affects not only business owners but also workers.
The lessons of the Shakira case
Along with the opportunities that come with living in Spain, there are also several tax challenges that must be taken into account to avoid possible complications,
such as those experienced by our beloved Shakira following the accusations made against her by the Spanish Tax Agency for allegedly having committed a tax crime related to her residence in this country between 2012 and 2014, and which led her to pay a fine of more than seven million euros.
His case reminds us that tax residency is not a minor issue and can generate significant financial repercussions if there is no adequate tax planning to ensure compliance with all legal requirements to avoid unfavorable interpretations. When establishing physical residence in one country or another, it is necessary to clearly determine where and how taxes will be paid.
In both Colombia and Spain, anyone who remains in the country for more than 183 days during the year is considered a tax resident, and this obliges them to pay taxes on all the income they obtain inside and outside (what they call 'worldwide income').
In this scenario, it is crucial, then, that those who want to invest in Spain carefully manage their physical presence, in order to avoid being considered as tax residents involuntarily, which could significantly increase the tax burden if adequate planning is not carried out.
Doxa and Prolaw Iberia Lawyers
In addition to the advantages of establishing residency in this country, Spain also offers other benefits such as legal security, a stable regulatory framework, respect for private property and a safe and predictable environment for foreign investors. This is especially important for Colombians seeking to protect their assets in a context of political or economic uncertainty.
At Doxa Madrid, we always recommend that our clients carry out detailed planning before making the decision to establish their tax residency in Spain, which allows them to maximize the benefits of their real estate investment without compromising their legal security. Good advice in this regard can make the difference between a profitable investment and a costly tax burden.
For this reason, we have recently entered into a strategic alliance with the Spanish firm Prolaw Iberia Abogados, experts in tax, real estate and immigration law, which allows us to expand our portfolio of services and offer entrepreneurs and investors a professional and qualified service, which covers all aspects related to tax planning, visa processing and the acquisition of property in Spain.
In this way, investors can be sure that their assets are protected and that any real estate transaction complies with current regulations in an efficient and safe manner.To conclude, investing in Spain is a smart decision for those seeking stability and profitability. However, it is essential to have a well-structured tax and legal strategy, so by consolidating the alliance with Prolaw Iberia Abogados, Doxa Madrid assures its clients a complete solution, ensuring that each step of the investment process is optimized to maximize benefits and minimize risks.
For more information, please visit
https://doxamadrid.comBy: Piedad Castillo, founder of Doxa