Taxes payable by non residents in Spain

This article seeks to clarify the different types of taxes which are potentially payable by non-resident property owners in Spain.

If you have the status of non-resident and you own or owned a property in Spain, you will be subject to non-resident income tax and the local council tax.

In addition, on a temporary basis, Wealth Tax for the years 2011, 2012, 2013, 2014, 2015, 2016 and 2017 has been reinstated.

Imputación de Renta – Non Resident Tax

In accordance with internal regulations in Spain, non-resident individuals, who are owners of properties located in Spanish territory, need to file annual non-resident tax returns if:

The property is for personal use
The property is rented as holiday accommodation

The tax return must be submitted every year.

In general, the procedure for calculating the tax is as follows:

Catastral Property Value x 1.1% (if the property has been revised in the previous 10 periods) or 2% x 19% (for residents of the EU, Iceland and Norway) or 24% (residents of rest of world).

You can read more about non resident tax for property owners here.

Impuesto del Patrimonio – Wealth Tax

Wealth Tax applies to individuals with assets in Spain in excess of €700,000. The declaration should be made regardless of whether you are resident or non-resident in Spain.

The first €700,000 of assets is exempt.

The tax payable is on a scale. This is an example of an individual with assets valued at €1m in Spain;

Assets €1,000,000.00

Exemption €700,000.00

Taxable amount €300,000

The first €167,129.45 is taxed at 0.2% and the remaining €132,870.55 is taxed at 0.3%.

This means that the total wealth tax €732.86.

Valencia Ayuntamiento

Ganancia de Capital – Capital Gains Tax

For those individuals who have recently sold a property in Spain, Capital Gains Tax may be payable.

The Capital Gains Tax is calculated based upon the difference between the purchase price and the sale price.

Any profit is taxed at 19%. Payments made in advance will be deductible, for example, 3% of the value of the property paid by Tax Form 211.

Plusvalía

The Plusvalía tax is often confused with Capital Gains Tax. However, it is a different tax.

Plusvalía, or Tax on the Increase in Value of Urban Land (IIVTNU), is a local tax that is regulated and implemented by each town hall.

This means that the rates can differ depending upon where the property is located.

The tax is based upon a combination of:

Location
Property size
Catastral value
Number of years in owners possession

3% Retention

When a property is sold by a non-resident, the purchaser of the property (resident or not) is obliged to withhold and pay to the tax office 3% of the property sale price.

This withholding tax represents payment in advance of any applicable Capital Gains Tax derived from the property sale.

The vendor of the property should receive a stamped copy of Modelo 211, which represents a receipt of payment of the 3% tax.

The vendor can then deduct the withholding tax from the Capital Gains Tax due. If the amount withheld is greater than the Capital Gains Tax to be paid, the excess refund may be obtained.

IBI – Council Tax

This is a local tax payable to the local town halls, which must be paid by the owners of real estate.

All real estate properties of each municipality are included in a census and are assigned a value (catastral value). The amount to pay is obtained by starting with the catastral value and applying the tax rate established by the local council.

The deadline to make the payment varies in each municipality, although normally it is around the months of September, October and November of each year.