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The non-resident property tax which must be paid on Spanish properties depending on the residency and tax status of the property owner and his particular situation

The non-resident property tax (Impuesto Sobre la Renta de no Residentes) is a tax on rental income for non-Spanish residents. If a property is rented, then income tax must be paid on the gross amount of rental income received at a rate of 24.75 percent (although since 2010, EU residents have been permitted to deduct allowable expenses).

Another tax applies to anyone who owns a property that is not their main home, and, if not rented out, a notional rental income is deemed to arise.  The amount is calculated according to this formula: catastral value of the property (this amount can be found in the IBI council Tax Bill) x 1,1% x 24.75%. So if for example the catastral value of your property is 250.000 euros x 1.1% x 24.75% = 680,62 euros. This should be submitted using tax form 210.  The same taxable amount applies to residents of Spain, but this is added to other income, and taxed at the scale rates.

The tax rates scope and reliefs may change. Tax information has been summarised and of course any individual must take pesonalised advice.

You pay this version of income tax in Spain if the following conditions apply:

1.- You do not reside in Spain

2.- You own 1 property or more properties in Spain

3.- The property is exclusively for personal use and you do not renti it out.

4.- You have no other source of taxable income in Spain. Althought ou do not ear and income from the property

Unfortunatelly, Although you do not earn an income from the property, in the eyes of the Spanish tax authorities you still derive a "benefit" from owning a property in Spain and therefore have to pay an imputed income tax.

Many foreigners never pay this taxes, but believe me one day you will receive a letter from the tax office asking this taxes from the last 4 years, plus the interes charges and a strong fine, besides if you sell your property they will retain 3% of the amount and you will never received back this 3% with profit or not, because you supossed to pay this non resident taxes before.

If you rent your property, you have to pay income tax on the rent instead fo the imputed tax described above (if you rent out your property to a Spanish Company the company will deduct tax at source and pay it to the tax authorities.

In our office we offer a full complete legal service and advice for only 500 euros per year, or just only 100 euros per person taking care of this non resident taxes.

Find more in the official web site in english language of the National Spanish Tax Office (Agencia Tributaria) please check  here:

http://www.agenciatributaria.es/static_files/AEAT/Contenidos_Comunes/La_Agencia_Tributaria/Segmentos_Usuarios/Empresas_y_profesionales/Empresario_individuales_y_profesionales/Folletos/IRNR_enero2011_en_gb.pdf

Information by Spain Legal
Spain Legal group has been providing tax planning to expatriates in Spain since 1997.
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