Tax obligations for non-residents
What are the reprocussions if I do not declare ?
How is the annual tax calculated ?
How does the situation change if I rent out my property ?
In the case of joint ownership, do we need to submit more than one return ?
Do I need to be registered for Spanish tax in order to submit returns ?
What are your charges to submit my annual tax returns ?
What information do I need to supply for you to calculate my tax ?
All non-residents with Spanish property are obliged to submit annual returns. The deadline is 31st December following the end of each tax year.
For example, if you purchased a property in June 2007, your first tax return will be due by 31st December 2008.
What are the repercussions if I do not declare ?
When you eventually sell your property as a non-resident, 3% of the sales value is automatically withheld from you. Because in many cases this will be more than the actual capital gains tax due, you could be due a substantial refund.
The refund process is slow and the authorities usually make a detailed review of the tax history of your property. If you have not submitted annual tax returns, this could lead to them refusing to issue the refund.
How is the annual tax calculated ?
Most non-residents need to submit simplified Form 214. The tax consists of two parts:
Wealth tax
The taxable base is the cost of your property less the mortgage on it. Please note that foreign loans taken out (e.g. a second mortgage on your home property) are also eligible.
For the first 167,000 Euros, the tax is only 0.2%. You will find the remaining tax bands on www.spainaccountants.com/rates.html .
Deemed income tax
This is income tax on the "imaginary" rental income that you have on the property.
In general this tax works out to be 0.264% (24% x 1.1%) of the rateable value (valor catastral) of the property.
If the rateable value has not been revised since 1st Jan 1994 then there is an increase in the tax rate to 0.48% (24% x 2%).
How does the situation change if I rent out my property ?
If your property is rented out on a full-time basis, you will need to submit periodic returns (Form 210/ 215) to declare this income . If this is the case, we can assist, please contact us for further details.
In the case of joint ownership, do we need to submit more than one return ?
Yes, each joint owner of the property is required to submit a separate return.
Do I need to be registered for Spanish tax in order to submit returns ?
Yes, property owners do need to obtain a Spanish tax code (NIF).
When you purchased your property, you will likely have been assigned a foreigners' ID number (NIE). The NIF will be the same number, but it is necessary to physically go into the Tax Office to register you.
Please note that in some cases, property owners may already be registered for tax. We will carry out an initial online check on the Tax Office database.
If you would like us to register you, all you need to do is fax the following documents to us on 00-34-933-969-075.
Our charge for this service, before 16% VAT, is:
What are your charges to submit my annual tax returns ?
Our current charges are as follows:
This includes:
* Alternatively you may prefer to pay the tax directly at your bank when you come to Spain. In this case we will send you the completed returns for presentation at your bank.
What information do I need to supply for you to calculate my tax ?