TAX OBLIGATIONS AS OWNER OF A PROPERTY IN SPAIN

SOME ASKED QUESTIONS ABOUT TAX OBLIGATIONS

  •  As owner of a Spanish property you have to fulfil the following obligations:

    • To make  the declaration of Income  Tax every year –
    • To present/pay declarations of tax called “Income Tax” (similar to “Inland Revenue”)
  • Yes, there are:

    If you are not living in Spain permanently, and/or you have not applied for the Spanish Fiscal Residence (You are paying your taxes in your country of origin)

    Then, you must make all the declarations and payments for taxes in the country in which you have the residence.

    In Spain you only have to make the proper declarations and payments for Income as  NON-RESIDENT

    For example: If you are coming from UK, and you are NOT living in Spain permanently, and you never applied for the Spanish Fiscal Residence, you have to make the declaration of taxes in UK, and in Spain only the taxes as SPANISH NON RESIDENT, because, although you are non-Spanish resident, you have a property in Spain.

    If you are living permanently in Spain and/or you have applied for the Spanish Fiscal Residence

    So, you have to declare/pay in Spain all the assets on your name which are placed in Spain, and/or overseas.

    For example: If you are coming from another country, and you are living in Spain for two years, and you applied for the Spanish Fiscal Residence, you have to make the declarations of taxes in Spain, as SPANISH RESIDENT. So, you should declare in Spain all earnings, pensions, assets, etc. that you could have in Spain, or which you receive from any other country in the world.


    So, the concept of “Spanish tax residents” or “Spanish tax non-residents” is directly related to the time of permanence in Spain during a natural year, in a period of time higher or lower than 6 months:

    More than 6 months – Spanish Tax Resident

    Less than 6 months – Non Spanish Tax Resident

    But,   WHY IS SO IMPORTANT TO IDENTIFY WHICH LAW IS APPLIED IN THE INHERITANCE?.-

    Because there are big differences between the Spanish and the other laws from other countries regarding the inheritance. The most important difference is that the Spanish have the figure of the “Compulsory” or “Obligatory Heirs” (Herederos Forzosos), which means that the testator cannot dispose from the full inheritance freely, and in whatever circumstances, he must leave the 66% of his inheritance for determinate persons called Obligatory Heirs (mainly descendants and spouses).

    This system of “Obligatory Heirs” is really common in countries like France, Belgium, Switzerland, Germany, Norway, Denmark, Sweden, Iceland, Norway, and Russia, in which the testator has the obligation to leave a percentage of his/her assets to determinate inheritors (usually surviving spouses and children). But, this system is totally different from other nationalities like UK, USA, etc.

    In this way, for example, UK Inheritance law allows the free disposal of assets, transferring will total freedom the inheritance set at the entire wish of the person. So, the testator has total freedom to leave whatever he/she wishes, to whoever he/she wishes.

    With this system, it could happen that an UK citizen, with two sons, and with a property in Spain, can make a Spanish Will leaving his/her property to his/her  friend, and that this last Will cannot be executed because, if Spanish laws are applied, then the 66 % of that property should be transferred to his sons, and only the remaining 33 % to be inherited by the testator’s friend.

    | THIS SYSTEM CREATED BIG CONFUSIONS AND MISUNDERSTANDING IN THE INHERITANCE OF EUROPEAN CITIZENS.

    REGLAMENT 65072012:  THESE CONFLICTS AND CONFUSIONS ARE ALREADY SOLVED BETWEEN EUROPEAN CITIZENS WITH A LAW APPROVED , AND THAT, ALTHOUGH SOME COUNTRIES STILL HAVE NOT SIGNED THEM, LIKE UK OR DENMARK, WILL BE OF APPLICATION IN SPAIN.

    This law, in simply words, gives 2 options :

    Option 1: YOU CHOOSE: – The law which will regulate the inheritance of a deceased will be the one chosen by the testator. It means that YOU CAN CHOOSE the LAW that you wish to regulate your inheritance. The perfect way to do it is to expressly confirm on your Will the law that you wish to regulate your inheritance.

    So, if you are French, British, German, Norwegian, etc, you can decide on your Will or Probate which is the law you want to be regulated after  your decease.

    Option 2: THE COUNTRY OF PERMANENT RESIDENCE: If you have not stipulated on your Will anything in relation with the law that you wished to regulate your inheritance, then, this law will be the one in which you had you residence during the last 5 years.

    In cases in which you have been living in different places, and/or the permanent residence is not clear, then, the law will be the one from the country in which you had the strongest connection during all your life.

    This Law, although approved on August 2012, it entered in force on the 17th of August 2015. So, after that date, inheritances where the deceased made a testament in Spain, or had the permandent residence, are regulated by this new law.

  • Applying for the Spanish Fiscal Residence in the Spanish Customs. This is a document which is given to you, once you demonstrate that you are living in Spain for more than 6 months (usually presenting the Padron (“Spanish electoral roll”, or with the electric and water bills).

    YOU ARE SPANISH RESIDENT, in the moment in which you get the SPANISH  TAX RESIDENT CERTIFICATION issued by the Spanish Tax Office or Spanish Customs, and then you start to pay your taxes in Spain, and not in your country. It means that your country leaves to tax your incomes, so is Spain who does it afterwards.

    You are considered as “Spanish Tax Residence” when you find in any of the following circumstances:

    • You spend more than 183 days in Spain in one calendar year. You become liable whether or not you take out a formal residency permit. These days do not have to be consecutive. (Temporary absences from Spain are ignored for the purposes of the 183-day rule unless it can be proved that the individual is habitually resident in another country for more than 183 days in a calendar year.)
    • Or, your “centre of vital interests” is in Spain, e.g., the base for your economic or professional activities is in Spain.
    • Or, your spouse lives in Spain and you are not legally separated even though you may spend less than 183 days per year in Spain.IMPORTANT: PERIOD OF TAX DECLARATIONS Note  that the Spanish tax years is the same as the calendar year (1 January – 31 December), unlike other countries like UK, which is from 6 April to following 5 April
  • Usually people confuse the “Spanish Tax Residence”, with the “Spanish Residence”.

    In other words, people think that the Spanish Residence Card, or Certification obtained in the Spanish National Police, is enough to demonstrate that they are Spanish Residents for Taxes, and, unfortunately, this is not enough.

    The “Spanish Residence Card” (or “Spanish Residence Certification“), is not valid to change your Tax residence from your country of origin to Spain. The Spanish Residence Card (or Certificate) only serves to declare that you are “living” in Spain, in order to facilitate the Police to have a better control over the residents in an area.

    In order to become Spanish resident for taxes, and then start to pay your Taxes in Spain as a normal Spanish citizen, you must obtain the SPANISH  RESIDENT TAX CERTIFICATION issued by the Spanish Tax Office or Spanish Customs, and then you will start to pay your taxes in Spain, and not in your country.

    And, also, once you need to declare to the Tax of office from your country that you are Spanish Tax Resident, and that you do not wish to continue as Tax Residence on your country-

    So, please, check with your tax adviser  the taxes that you are currently paying because, even if you are not Spanish Resident, you should be declaring and paying the INCOME TAX NON RESIDENTS, the model 210 (after 2008).

  • In both cases, once every year.

    • In case of Spanish Residence Tax: Before the end of June from the following year
    • In case of Spanish Non Residence Tax: Before the end of December of the following year

     For example: For the year 2017, Spanish Non Resident Declarations must be presented before the 31/12/2018 is due the presentation of NON RESIDENT tax declarations for the year 2017for owners of Spanish properties bought on, or before, 2017.

    This tax is called “Income Tax for Non Residents”. And, it must be paid event if you have not any incomes in Spain. Only for the fact that you are owner of a Spanish property, and that you are not living in Spain permanently.

    In case you have received some earnings/incomes from the property

    For example: From renting the apartment, then, you need to present additional tax declarations for these incomes quarterly in the same quarter of the year when the income is produced. Click here to read more
  • Yes, independently of your condition as resident or nor resident, you have taxes obligations to fulfil every year, as in any other country.

  • Independently of your age, you have to pay Spanish Taxes in Spain, as Spanish Tax Resident, always that you are not in one of the following circumstances:

    1.- You do not earn more than 22.000 EUR per year (approximately), if your incomes are coming from just one payer.

    2.- If your incomes are coming a “private pension” or  from 2 different payers (for example you have a public pension and a private one), then, even if you earn less than 11.200 EUR per year,  you would need to present Spanish Residence Tax declaration.

  • This could be possible because maybe they could not be assisted in the right way by their legal or tax advisors, and they are now in risk to be inspected by the Spanish Tax office, and with high fines.

  • After the new changes in the control from the Spanish Customs, Spanish Residents and Non-Residents with a property in Spain can be inspected by the Spanish Customs.

    If they detect that, in the previous 4-5 years, even living in Spain permanently, you  have not obtained the Spanish Tax Certificate or you never made the proper declarations, or these are not made in the proper way, an inspection case can be opened with eventual additional fines.

  • Click here to see which are the taxes that you have to pay when you are selling a property in Spain.

  • Here are other taxes to pay when you are owner of Spanish assests:

    1.- WEALTH TAX: 

    It taxes the assets that you may have on your name:

    • If you are non-Spanish resident: Then, this tax taxes the assets that you may have in Spain
    • If you are Spanish resident: Then this tax taxes ALL the assets that you may have in Spain, and in any other country of the world

    In Valencia region, you only declare for this tax when:

    • Being non Spanish resident: Your assets in Spain overpasses the amount of 600.000 EUR
    • Beng resident in Spain: Your assets in all over the world overpasses the amount of 600.000 EUR

    Paid yearly

    2.- COUNCIL TAX/GARBAGE:

    This is the tax which taxes the real estate on your name, and the garbage collectionClick here to know more

    Paid yearly


WOULD YOU LIKE TO SPEAK WITH ONE OF OUR SPECIALISTS?

Call us now! We are waiting to help you! +34 965 48 81 68

TLA OFFERS TAX ASSISTANCE FOR NON RESIDENTS IN SPAIN

HOW WILL YOU DEAL WITH MY TAXES AS NON RESIDENT?

We will request from you all the necessary paperwork to make the declarations directly by EMAIL, post, or by security courier. With these documents we will elaborate all the declarations on your behalf, and, once they are ready, we will instruct you about the payments. In this way, you will have a specialist tax advisor at your disposal to make your proper declarations of taxes in Spain, directly from home

WHAT SERVICES IN TAXES CAN TLA OFFER ME?

·Elaboration of the Income
·Tax declarations for the User, and for the wife/husband, or partner who is currently living with the User.
· Payment of the taxes.
· 10 queries per year by post, or e-mail regarding
· Obtaining of the best individualized solutions for tax purposes
· Inheritance Tax Advice

IS THIS AN ONLINE SYSTEM?

This service is created to give you the most comfortable solution to your tax obligations, without lost of time in visits to the tax advisor office, parkings, etc. Directly from home to the tax advisor.


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