housing rent taxes that pay real estate not reside

Whether you are one of those Spanish people who living abroad, or you are a non-resident foreigner who has bought a house in Spain, you must pay taxes, regardless of whether this property is available for your own use or rented.

Am I resident or non-resident?

The first criterion is to consider as a tax resident of Spain those persons who remain in Spain for more than 183 days during a calendar year. The second criterion is that the basis of its economic activity must be located in Spain, directly or indirectly. If your spouse and minor children live in Spain, you automatically become a resident for the tax administration. Also, according to the law, spouses and joint owners are considered separate taxpayers. Each of them must file their tax return. The total amount of taxes will be divided between the co-owners of the property.

What property taxes should I pay?

In particular, you will be faced with property tax (IBI) and non-resident income tax (IRNR), and in some cases with property tax (IP) and and special property tax (GEBI).

Let's look at the characteristics of each of them:

Property Tax (IBI)
This is a municipal tax (city council in which the house is located), better known as “Contribution”, and is calculated on the cadastral value of the object.

Non-Resident Income Tax (IRNR)
This tax must be paid by the owner of the property located in the territory of Spain living abroad. Depending on the purpose, which gives the property, the income taxable is:

  • City property for own use:

The fiscal value of this obligation is minimal, but mandatory. To calculate this tax, you need to multiply the cadastral value by 2% (1.1% in case of revising its value over the last 10 years), then multiply by a tax rate of 24% for non-residents and 19% for residents of the European Union and the Economic Zone.

For example:

If you are a non-resident, and the cadastral value of your real estate is 45.000 €, then to pay income tax on real estate you will need: 45,000 x 1.1% x 24% = 118.80 € which is paid once a year through the income tax of non-residents of model 210

  • The property is leased to a private person:

In this case, the declared return will be the entire amount levied on the tenant, without deducting any expenses, except for residents in the countries of the European Union or the European Economic Area, for example, interest on the loan requested for the purchase of real estate, repair costs and its maintenance, real estate tax, utility costs, consumables. This yield will be taxed at a rate of 24%, which will be 19% in the case of residents.

Since the property is leased to a private person, the model for the declaration of these rental agreements will also be income tax on non-residents of model 210. The deadline for submission and income in this case will be the first twenty calendar days of April, July, October and January, with respect to income, the accrual date of which included in the previous calendar quarter.

For example:

If the apartment owner does not live in Spain but rents his apartment in Spain throughout the year and brings a monthly income for a rent of 600 euros, then: 600 € x 12% x 24% = 1.728 € is the annual fee to pay.

However, the apartment owner must submit a model 210 each quarter. In total, four 210 models per year will be released, each of which includes a three-month lease, so the fee for each quarter will be 432 euros.

Property Tax (IP)
Although the owner of the property does not have his usual place of residence in Spain, as he is the owner of the property located in Spain, he will be a tax payer of property tax because of the real obligation to pay contributions.

Based on the current legislation and on a temporary basis, which is charged on December 31 of each year if there are assets in the amount of more than seven hundred thousand euros, you must pay a tax of 0.2 - 2.5% of the value of assets through the model 714.

Special Property Tax (GEBI).

If you purchased a property in Spain through an offshore holding, you must pay 3% of the cadastral value of the property annually. For non-residents, compensation for this tax is sometimes provided, but in most cases legal advice will be helpful.
Payments are made until December 31 through the taxing form 213.

What happens if I ignore these taxes?

  • you may refuse to extend the residence permit
  • such actions are in violation of Spanish law. Subsequently, you will not be able to sell your property, or pass it on by inheritance.
  • the unpaid taxes will increase the penalty, and the authorities will have the right to collect the debt in compulsory order, up to the blocking of bank accounts
  • in some cases, local authorities may confiscate your property

How can I find out about my taxes and debts from outside Spain?

Through a trusted representative who will receive all notifications. You can also use the services of our company, just contact us. You will be kept informed of all events and all news related to your tax obligations.

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