Tax obligations as owner of a Spanish property
Tax obligations as owner of a Spanish property
1.- Important points to consider as property owner in Spain
Which obligations I have as owner of a property in Spain?
As owner of a Spanish property you have to fulfil the following obligations:
- To make the declaration of “WealthTax” every year (in case the value of your Spanish assets are higher than a minimum of average 400 – 600.000 EUR/person).
- To present/pay declarations of tax called “Income Tax” (similar to “Inland Revenue”) every year
- To present/pay declarations of tax for the incomes received from your property in Spain
Which are the differences between “Spanish Tax Residents” and “Non Residents”?
Yes, there are:
NON Tax Resident
In case 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.
Spanish Tax Resident
In case 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
If I have the “TIE” (Spanish Residence Permit), it means I am Spanish Tax Resident?
Usually owners of Spanish properties confuse the “Spanish Tax Residence”, with the “Spanish Residence”.
In other words, people think that the “Spanish Residence Card, or “Residence Certificate” obtained in the Spanish National Police, is enough to demonstrate that they are “Spanish Residents for Taxes”, and, unfortunately, this is not the case.
The “Spanish Residence Card” (or “Spanish Residence Certification“), is not the valid document to change your Tax consideration as “Tax Resident”.
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 a determinate 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 of origin.
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.
When I have to present Income Tax declaration in Spain as resident, or as non resident?
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 2021, Spanish Non Resident declarations must be presented before the 31/12/2022 is due the presentation of NON RESIDENT tax declarations for the year 2021, for owners of Spanish properties bought on, or before, 2021.
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
Are all of these obligations required for both, residents and/or non residents?
Yes, independently of your condition as resident or nor resident, you have taxes obligations to fulfil every year, as in any other country.
I am tax resident in Spain, and I have the “TIE” do I have to present Income Tax declarations?
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.
Can I live in Spain and do not present Income Tax declarations?
This could be possible because maybe their incomes have never arrived to the minimum amount needed to get the obligation of tax declaration.
But, we always recommend to receive the proper legal or tax advice, and as there is always the risk to be inspected by the Spanish Tax office, and with high fines.
What happens if I do not declare my taxes in Spain?
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.
Which are the taxes when selling a property in Spain?
Click here to see which are the taxes that you have to pay when you are selling a property in Spain.
Are there any other taxes to pay in Spain as property owner?
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
2.- Council Tax/Garbage:
This is the tax which taxes the real estate on your name, and the garbage collection. Click here to know more
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