Last Updated on February 20, 2024 by Kristina Valcheva
Ever wondered what is deemed tax?
If you own property in Spain and rent it out you are obliged to pay Spanish tax on rental income.
On the other hand, deemed tax (also known as imputed tax) is a tax paid by non-residents in Spain who own properties located in the country that were not rented. In Spanish it is known as Renta Imputada de Inmeubles Urbanos.
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 Spanish tax return (Form 210) to report the “deemed income”.
If you are an owner of 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.
- In this article:
- What is urban property?
- When do I need to file a Spanish deemed income tax return? When is the deadline?
- How is Spanish deemed income tax calculated?
- What is the cadastral value of a property?
- How to calculate the cadastral value of a property?
- How much rent income is taxable?
- What if you are a UK or an Irish citizen?
- How PTI Returns can help?
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 returns.
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 24 December of the next tax year.
If you purchased a house in September 2022, your annual deemed income tax return should be filed by 24 December 2023.
How is Spanish deemed income tax calculated?
Deemed income in Spain is determined based on the official rateable value (valor catastral) of the property. You can find the most recent valor cadastral on your annual property tax bill (Impuesto sobre Bienes Inmuebles – IBI).
The “cadastral value” of the property defines the tax range, which varies and is typically 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.
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 a special interest in the property.
You can also check the amount on the IBI invoice where it should be outlined.
There are different factors used to determine 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 an electronic DNI (digital stamp). If you have made the request in person, you must submit documents to verify the ownership.
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 Returns 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 Returns’ account manager can assist you with double taxation agreements.
How PTI Returns can help?
PTI Returns 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 Returns team here.
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