Owners of rental property in Spain are liable to pay Spanish tax regardless of whether or not they are resident for tax purposes there. If you’re living in Spain for more than 183 days in a given tax year (1 Jan – 31 Dec) you’re considered a resident for tax purposes, even if you have not obtained a Spanish residence permit.
The current Spanish rental income tax rate for non-residents is 24% of gross income with no deductions permitted for expenses. However, EU residents may deduct expenses against rental income provided such expenses are directly related to the rental income generated from the Spanish property.
They can also avail of a reduced income tax rate of 19.00%. Spanish rental income must be reported and paid one month after the rent is received.
Deemed Rental Income
Tax on deemed rental income is payable on urban property for the period during which the property is not let. The taxable base is calculated at 2% of the registered value (‘valor catastral’) of the property that has not been evaluated for the last 10 years. For registered value reviewed in the past 10 years, the taxable rate is calculated at 1.1%. General income tax rate is applicable on the base.
Spanish Local Property Tax
Spanish Local Property Taxes (rates) are based on the rateable value of the property and generally vary between 0.4% – 1.1%. Rates depend on whether the property is urban or rural and varies per region. They are generally due from September to November each year. An annual local tax on mains drainage & refuse collection is also payable.
Spanish Capital Gains Tax
A non-resident selling property in Spain will pay a rate of 19.00% Spanish Capital Gains Tax (CGT) on the gain from the sale of the property. The purchaser must withhold a public treasury tax of 3% of the purchase price at the time of the sale and pay it to the Spanish tax authorities within a month of the transfer.
If the amount withheld by the purchaser exceeds the CGT payable, the seller may claim a refund of the excess amount. A Spanish CGT tax return should be filed within three months of the payment of the withholding tax.
Wealth Tax
Non-resident owners of Spanish may be obliged to pay wealth tax depending on the value of their Spanish property. The wealth tax rate ranges from 0.2% to 3.7% of the value of the property. There is a general exemption of €700,000 which is not subject to wealth tax.
UK & Irish Residents
If you are resident in the UK or Ireland you will have to report any income received in Spain on your annual tax return. There are double taxation agreements in place between Spain and both Ireland and the UK so double taxation relief will usually apply. Your PTI Account Manager can advise on double taxation relief and assist with the filing of your UK or Irish tax return.
Spanish Tax Services
Our Spanish tax return service is delivered by our in-house team of tax specialists. We do not outsource any part of the process, ensuring your return is managed at all times by PTI.
We understand that the Spanish tax return process can be complicated and involves many different considerations so we will keep you updated throughout the process and communicate directly with both your Spanish accountant (if applicable) and the Agencia Tributaria (the Spanish tax office) on your behalf.
We offer the following Spanish tax return services:
- Spanish deemed tax returns
- Spanish rental income tax returns
- Spanish Capital Gains Tax filing
- Assistance with Spanish tax payments
- Coordinating with your tax resident accountant
FAQs
- As a non-resident property owner in Spain, do I need to file a Spanish tax return?
- Yes. If you own Spanish property you have an obligation to report your rental income to the Spanish tax authorities.
- When do I need to file Spanish deemed income tax return?
- As a non-resident if your property is an urban property and not let, you must still pay Income tax on ‘deemed’ rental income. In case the property is partially let Spanish Deemed income tax is applicable only for the period in which property was vacant or occupied by the owner for personal use.
- How is Spanish deemed income tax calculated?
- The taxable base of the deemed rental income is calculated at 2% (or 1.1% if the value was revised in the past 10 years) of the rateable (cadastral) value of your property. The taxable base is then multiplied by general income tax rate.
- What is the ‘cadastral’ value of a property?
- The cadastral value is the value set by the local Town Hall on a property. It is used for calculating the local property taxes (rates) and Spanish Deemed rental income tax.
- When is the deadline for filing a Spanish rental income tax return?
- Income must be reported and taxes paid within a month of receiving rental income in Spain. Alternatively quarter Spanish Rental income tax returns could be filed.
- Am I obliged to pay Spanish wealth tax?
- Non-residents in Spain may pay Wealth Tax depending on the net value of their Spanish property. The tax rate ranges from 0.2% to 3.7% from the value of the property. There is a general allowance of currently €700,000 which is not subject to wealth tax.
- What is the current rate for Spanish Capital Gains Tax?
- Spanish Capital Gains Tax rate is currently 19.00% on the gain from selling the property.
- What are the Spanish CGT implications that I may have as non-resident?
- Under Spanish law, in case the seller is non-resident the purchaser must withhold Public treasury tax at 3% of the purchase price and pay it over to the tax authorities within a month of transfer. A reclaim may be required if the 3% paid exceeds the final Spanish Capital Gains Tax liability.
The Spanish Capital Gains Tax return should be filed and paid within three months of the withholding tax payment.
Spanish Property Tax Rates and Deadlines
Deemed rent – 31st of December
Spanish Fees
Filing services are offered to non-Spanish residents
Initial documents review – €150.00
This fee will apply only once for review of your property related documents for set up of your tax file with PTI.
Spanish Deemed tax Returns – €60.00 (single owner – 1 property)
A deemed tax return is required when the property is not rented out either for a portion of the year or for the entire tax year.
Spanish Quarterly Rental Income Tax Returns – €100.00 per return
This fee applies for single owner for 1 property. A fee of €50.00 for each additional owner is due.
Complex filing fee – €260.00
This is a complete service covering the necessary tax returns (single owner – 1 property), and includes a detailed review of all supporting documents. Half of the fee will apply to each additional owner as to cover necessary separate quarter rental and deemed returns due.
Spanish Capital Gains Tax filing – price will be based upon complexity of case and starts at €400.00.
Registration fee – €90.00
Fee due for tax registration services and applies per individual.
Additional property – €195.00
This fee is due for 2nd and each subsequent rented property.
Documents retrieval fee – €50.00
This fee will apply if you require PTI to obtain some documents on your behalf, excluding bank and mortgage statements.
Administrative fee – €20.00
This fee is obligatory and due for each year of submission. It covers postage, phone calls, photocopying etc.
Assistance with tax payments – €30.00
Multiple years discount – 10%
Available where returns for 2 or more tax years are required. This discount is applicable to the annual fees excluding any once off fees and administrative fee and does not apply where other discounts/reductions have been granted.
Notes:
- All fees are inclusive of VAT.
- Prices are based on provision of information in pre agreed format – a surcharge of 20% may be applied for disorganised files.
- Prices are based on provision of necessary backup documentation only – the inclusion of unnecessary documentation may result in the application of an additional charge.