Taxes and Non-Residents Spanish Property Owners

Non-resident owning a spanish property are liable to pay every year:

  • IBI: a local tax; and
  • Non-Resident Income Tax
  • Also, depending on the value of your Spanish assets (exceeding €700,000) you might be subject to Wealth Tax

The IBI can be set to be debited each year from your spanish bank account. Non-resident income tax derived from rentals is payable as income accrues. If you have a property in Spain for your  private use, you will also have to file a tax form concerning deemed income.

If you own an apartment or a villa which is classified as urban land, your  assets exceed the exemption limits and that property does not  qualify as “rural” land you can get taxed on income even if you don´t rent out your property, becoming subject to Non-Resident Income Tax

Most Non-Residents query if they have to appoint a Spanish Tax Representative, It isn’t compulsory if you only own one property for your private use however it is always advisable. If you are liable to Wealth Tax then, you will definitely have to appoint one.

Contact us if you need a Spanish tax representative. We will ensure you receive any communications from the Spanish tax authorities about your property. Don´t leave important tax demands unattended in your Spanish post-box while you’re at home abroad. We can then notify you and respond straight away.  

Selling your Spanish Property, Taxes.

On the basis that you make a gain from the difference between your original acquisition value and the sale price you can be subject to Capital Gains Tax,   The Spanish tax authorities will tax this Capital Gain by means of two taxes:

  • a Local Capital Gains Tax (which is levied by the Town Hall where the property is located and depends on local values); and
  • a General Capital Gains Tax (the applicable rate for 2012 is 21%)

For a start, 3% of your property’s sale price must be retained by the buyer and paid to the Spanish tax authorities as a contribution to Non-resident Income Tax liability regarding capital gains.

With the Spanish Real State market going down, will 3% of the sale price actually exceed your spanish Capital Gains Tax liability? Which Options do you have?

The 3% retention still has to be made.  We can apply for a partial or total refund from the tax authorities on your behalf.  

Inheritance Tax

In Spain, inheritance tax is paid by the heirs to an estate.  

If you need advice on Spanish Taxation, contact our office: 951 082 338. Free Consultation.

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