Property Tax in Spain for non-residents: answers to distressing questions.

Property Tax in Spain for non-residents: answers to distressing questions.

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Property tax in Spain is a compulsory contribution to the state taxation system. It has to be quite clear that each person visiting or residing in Spain with the intent of buying property has to pay a fiscal quota. In general, it depends on the price of the selected property and the days the owner spent in Spain. Due to the approaching end of the year and the deadline for paying this tax, we wanted to remind you what it is and save your money from unwanted controversy.

1. Do I have to pay tax in Spain on a property I only use on holidays?

One of the most common questions for people who do not live in Spain and decide to acquire a property for vocational purposes in Spain is about the taxes they will have to pay on it. 

The answer is certain: Spanish Non-Tax Residents must pay Personal Income Tax on the property they have in Spain, even if they are not renting it. 

2. How do I know if I am a non-tax resident in Spain?

Spanish Tax Residency depends on the number of days an individual is physically in Spain. 

If you have been physically in Spain less than 183 days on a natural year, which runs from January 1st to December 31st, you will be deemed as a Spanish Non-Tax Resident. 

If this is the case, you will only have to pay taxes on your Spanish Sourced income. 

One of the incomes that would be included in your Spanish Non-Resident Tax Return is the imputed real estate income. 

Learn more bout the difference between Spanish Tax Resident and Non-Spanish Tax Resident.

3. What is the Imputed Real Estate income?

The Imputed Real Estate Income is a presumption that the Spanish Tax Authorities make. 

It is not that you are literally perceiving an income from a property that you have in Spain just for holidays and that you are not renting. 

The fact is that Spanish tax Authorities will allocate you an income. It made upon the fact of having a property in Spain that you are not renting and is not your habitual residency (as it is your holidays’ residency). This rule applies to Spanish Tax residents and Spanish Non-Tax Residents

Spanish tax authorities believe that this measure improves the economy of the region. They stimulate those properties to be rented or bought for living purposes and not just held for speculation. 

Therefore, they attribute an income to the owners of non-rented properties. 

4. How big Imputed Real Estate Income?

The income that will be imputed is 1,1% of the cadastral value of the property. The percentage might be 2% if the cadastral value has not been updated in the last 10 years. 

The cadastral value is the value that the property has for the town hall tax authorities. 

In case you have acquired the property in the middle of the year, the imputed real estate income will be allocated according to the number of days in the year you have been the owner of the property. 

5. How much property taxes will i have to pay on this income?

The tax rate applicable to the imputed real estate income will depend on your tax residency. 

If you are a Tax Resident on an EU country, the tax rate will be a flat 19%. 

If you are a Tax Resident in a Non-EU country, the tax rate will be a flat 24%. 

6. When and how do I have to pay taxes on this income?

Taxes on imputed real estate income will have to be paid during the year after of the ownership of the property and will have to be paid through form 210. For this payment you will need a Spanish Bank Account. 

Continue reading about Taxes in Real Estate: The 4 Main Tax Implications to Consider in Spanish Real Estate(Opens in a new browser tab) or get a free consultation on your case with our tax lawyers.

 

Author:

Jose Garcia, tax expert for questions on property tax in Spain.
Jose Garcia, Head of Tax Department

In case you need assistance on this payment of taxes, from Lexidy Law Boutique, we will be glad to help you. 

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