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Spanish Property Tax

What are deemed tax returns for a property in Spain?

Ever wondered what is deemed tax?

This is a tax paid by non-residents in Spain who own properties located in the country that were not rented. They are subject to non-resident deemed income tax.

Landlords with a house or apartment in an urban area that is not let, are still obliged to pay tax on “deemed rental income“. In case the property is partially let, Spanish Deemed tax is applicable only for the period in which it was vacant or occupied by the owner for personal use.

These landlords must file a non-resident income tax return (Form 210) to report the “deemed income”.

If you are an owner of a real estate through a company in Spain, this obligation does not apply to you. If the company is located in the “tax haven”, managers should file form 213 each year and pay a similar tax.

In Spain, landlords owe tax for house rent and apartment rentals in urban areas.

Wondering what is deemed property tax for Spain?

What is urban property?

In real estate, this is a property (house, villa, apartment, flat, etc) located in an area, which is well-developed, with high population density.

Spanish urban municipalities have regulations regarding tax on registered property for rent. A landlord and property accountant should follow these regulations and due dates for tax return.

Rentals in urban areas

When do I need to file a Spanish deemed income tax return? When is the deadline?

The deadline for non-residents to submit a deemed tax return is 31st December of the next tax year.

If you purchased a house in September 2019, your annual deemed income tax return should be filed by 31 st December 2020.

Spanish Deemed Tax Return Assistance

How is Spanish deemed income tax calculated?

The “cadastral value” of the property defines the tax range, which is between 0,21% and 0,48% of this cadastral value.

The percentage depends on the country of residence of the owner and if the cadastral value has been reviewed in the last 10 years.

Deemed tax return due dates & rates in Spain

What is the cadastral value of a property?

The cadastral value of the real estate is usually different than the market value of it and is much lower (It can never exceed it). It is determined by the municipal government.

How to calculate the cadastral value of a property?

This is a free service. You must contact the Land Registry to calculate the cadastral value of your apartment for example. You will need it in order to file your annual tax return.

To check this information, you must be the owner/ show that you have authorization or manifest special interest with the property.

You can also check the amount on the IBI invoice where it should be outlined.

There are different factors used to determine the cadastral value, such as location, market conditions, the quality of the land, and others.

If you have requested this information through the Online Land Registry Office, you must identify yourself with electronic DNI (digital stamp). If you have made the request in person, you must submit documents to verify the ownership.

Calculate the cadastral value of a property

How much rent income is taxable?

The tax rate for non-residents is flat 19% (for residents of the EU) and 24% for others.

Check out PTI to find out more about Spanish tax rates.

What if you are a UK or an Irish citizen?

Double taxation relief will be applied since there are double taxation agreements between Spain and UK/ Ireland. Your PTI account manager can assist you with double taxation agreements.

Double taxation agreements between Spain, the UK and Ireland

How PTI can help?

PTI offers a variety of tax return services. Our services are delivered by our tax experts, who will assist you through the entire process of filing tax forms in respect of rental income.

We understand that the Spanish tax system can be complicated and we will keep you updated through the entire procedure and communicate directly with Spanish tax authorities on your behalf.

Got questions about Spanish tax? Contact PTI team here.

Property Tax Assistance