Property taxes in Spain by non-residents
- Non-resident Income Tax:
- Personal use of the real estate
Tax base: The amount resulting from multiplying the rateable value of the property for 2%, or 1,1% if the property rateable value has been review in the previous 10 years.
Tax rate: For EU residents 19%. For other tax payers 24%.
Tax Form: 210
Submission period: all the year following the year to which the declaration refers.
- Real Estate rental income
- As a family residence:
Tax base: The whole amount received from leasing, without deducting any expenses excepting for EU taxpayers.
Tax rate: For EU residents 19%. For other tax payers 24%.
Tax Form: 210
Submission period: On quarterly basis, within the first twenty days of the months of April, July, October and January. The payment can be direct-billed before day 15th.
- As a business premises:
Tax base: The whole amount received from leasing, without deducting any expenses excepting tor EU taxpayers.
Tax rate: For EU residents 19%. For other tax payers 24%.
Tax Form and submission period: Since you leased the property as a business premises, you must not submit the NRIT Tax Return (form 210) on quarterly basis, but it will be your tenant who will submit and pay to the Spanish Tax Authorities on your behalf (withholding tax)
- Wealth Tax:
Tax base: The highest between cadastral value, administration proved value and acquisition price.
The current tax free allowance is 700.000 euros.
Tax Form: 714
Submission period: Between April and June of the next year to which the declaration refers.
Double Tax Treaties should be analysed in each case to confirm that its content does not regulate better tax rates that the Spanish Domestic tax system.
INDIRECT TAXATION
- VAT:
If you lease the property as a business premises, you must charge VAT on your invoices to the tenant at the rate of 21%.
You will also have the right to deduct the VAT borne in the performance of your rental business activity. Therefore, the final VAT due will be the difference between the output VAT and the input VAT.
The submission period will be quarterly (Form 303) and annually (Form 390). In particular, from the 1rst to the 25th of the month of January, and from the 1rst to the 20th of the months April, July and October in relation to the previous quarter.
- Local Property Tax:
This tax is levied on an annual basis by the municipalities on the possession of immovable property by both an individual and an entity. The taxable base is the cadastral value. The value is adjusted every 8 years regarding the market value of the property, including the value of land and buildings.
The general tax rates depend on the City Council in which the property is located.
The City Council establishes the possibility of direct-billing the payment in a bank account, which ensure that this is done within the established payment period and surcharges are avoided.
Autor: Laura Lamas