Do you already have a home in Spain or are thinking about buying one?
You should know the fiscal obligations you need to comply with, which will depend on your fiscal residence status.
If you are non-resident
There are two different taxes payable by every non-resident owner:
- Local tax payable to the Town Hall annually, known as local rates (IBI). For this payment we could arrange a DD, being the tax charged automatically to your Spanish bank account.
- National tax payable to the Government annually, known as Income tax. This tax is based on the cadastral value of the property and needs to be submitted to the Tax Office annually in arrears. We calculate the total figure every year and inform you accordingly with sufficient notice.
We provide a comprehensive and professional Fiscal Representation service, which also includes formalities and proceedings at the Spanish Revenue (Agencia Tributaria).
Apart from these taxes, there are others applicable in determined occasions:
- Wealth tax: due to the public deficit, the Government has re-established this tax for fiscal years 2011, 2012 and 2013 under some limits:
- Spanish assets valued in more than 700.000, 00 € minus deductions
- Spanish assets valued in more than 2.000.000, 00 € without deductions
Nevertheless, each region is entitled to reduce the Wealth tax rate and even to approve an exemption. Therefore, depending on where the property is located, the owner will be taxed by the Wealth tax or not.
- Rental income tax: due when a property is rented out. This tax is declared quarterly being necessary to provide a certificate of fiscal residence to deduct annual expenses of property maintenance from the gross incomes. Just the citizens of the EU are able to apply the deductions. The tax rate is 24, 75% on net income of EU citizens. The same rate applies on the gross income for citizens outside Europe.
- Corporation tax: due when a property is owned by a non-resident company. From year 2013, just the companies located in fiscal paradises are obliged to submit this tax.
- Capital Gains tax: In the event of selling your property in Spain as a non-resident, the buyer is committed to retain a 3% of the price from you and paid to the Tax Office as a payment-on-account. If you are making no profit on the sale, we will manage the refund of that 3% retention. The tax rate is 21% on net profit.
- Inheritance Taxes: There is no exemption from inheritance tax between husband and wife. A tax form must be completed and the taxes paid. In Spain is the heir who is taxed and not the estate. Tax will be calculated on the relationship of the heir to the deceased, the amount of the inheritance he/she receives and existing wealth. All assets will be taxed – bank accounts, property, cars, golf shares, etc.