Tax guide for Non-resident owners of Spanish Property

All non-residents with Spanish property are obliged to submit quarterly and/or annual returns.

This article will cover:

  1. My Spanish property is non-rented / a holiday home, what taxes should I pay?
  2. I receive rental income on my Spanish property, what taxes should I pay?
  3. How does a joint ownership tax return work?
  4. What information do I need to supply for you to prepare my tax returns ?
  5. What is the ‘valor catastral’ of my property?
  6. What expenses can I claim on my tax return?
1. My Spanish property is non-rented / a holiday home, what taxes should I pay?

You will need to file an annual income tax return to pay the deemed income tax on your non-rented property.

This is income tax on the “imaginary” rental income that you have on the property, and is calculated in reference to the rateable value (valor catastral) of the property.

The deadline is 31st December following the end of each tax year. For example, if you purchased a property in 2019, your first tax return will be due by 31st December 2020.

We can calculate your tax liability based on the rateable value and file your return on your behalf as part of our service.

2. I received rental income on my Spanish property, what taxes should I pay?

If your property is a rented out, you are required to make a tax declaration for each quarter in which you have rental income.

For the tax year 2020, the tax rate is 19% for residents of the EU, Norway and Iceland, with all rental expenses (including mortgage interest) being deductible for tax purposes.

For residents of other countries, the tax rate is 24% with the rental income received being fully taxable with no deductions.

If you are unsure whether or not you need to file a quarterly tax return, you can send an email to admin@spainaccountants.com where we will be happy to assist.

3. How does a joint ownership tax return work?

If you jointly buy a property in Spain, both you and your co-owner will have to file a tax return separately.

Only if the property in question is jointly owned by a married couple in which both spouses are non-residents, a single tax return may be filed.

4. What information do I need to supply for you to prepare my tax returns ?

We would require the personal details of each property owner and also the basic details of your property, including the date and cost of purchase and the valor catastral.

Please feel free to contact us to request the client information form for full details.

5. What is the ‘valor catastral’ of my property?

The valor catastral is equivalent to rateable value.

You will find this value on your latest rates (IBI) bill; for recently purchased properties, the lawyer/ agency who dealt with the sale may also be able to provide you with this information.

Note that this is not same as the purchase price or market value of your property. You can read more on the valor catastral here.

6. What expenses can I claim on my tax return?

As mentioned above, only residents of the EU, Norway and Iceland, can deduct rental expenses for tax purposes. Here are some examples of allowable property expenses:

  • Agency fees
  • Accountancy fees
  • Community fees
  • Utilities 
  • Repairs
  • Maintenance charges 
  • Property tax
  • Mortgage interest

For residents of other countries, there are no deductions permitted for expenses .

Need help with filing your non-resident income tax returns?

Our current charges, before 20% VAT, for each return (quarterly or annual) are as follows:

Single property owner 75 Euros
Reduced rate for joint ownership 95 Euros

This includes:

  • Drawing up your draft tax calculation and submitting to you for approval.
  • Online submission of the return and order for the payment of the tax due directly from your Spanish bank account.

Please note that the reduced rate for joint ownership is for those who are married in which both spouses are non-residents. If this is not the case, then you will be charged to file two separate single tax returns.

If you are interested in our services, please contact us and we will send you all the relevant details required to file your tax returns.