Non Resident Property Tax Spain Direct From Bank?
Spanish income tax – Spanish Income Tax does not apply to the principal residence of a resident owner. However, it does apply to a second residence. In the case of a non-resident , as this property is not considered a principal residence, the tax must be paid on an annual basis.
The tax payable is 2% of the cadastral value of the property as fictitious rental income. It can be reduced to 1. 1% if the cadastral value has been raised since 1994 – and in many cases it has been. For residents, this tax is paid as if it were a profit.
For low income, the percentage to pay is 15% and for high income, the percentage is 30% or even 40%. A non-resident is always taxed at a fixed rate of 24% on any income arising in Spain. This 24% income tax should not be confused with the 21% capital gains tax on profits from the sale of assets, such as a house or shares in a company.
What are the tax changes for non-residents in Spain in 2017?
Imputed income tax or rental tax in Spain – Rental tax is a compulsory property tax in Spain, for everybody, meaning that there are certain dates that rental tax needs to be paid by. Pay it quarterly, every year in the following pattern:
- 20th April
- 20th July
- 20th October
- 20th January
The Spanish government introduced changes to the amount of tax that non-residents have to pay from the 1st of January 2016. The changes that non-residents should be aware of include:
- For the year 2017, the Spanish rental income tax remains at 19% for those non-residents who are tax resident in a country within the European Union, Norway and Iceland and 24% for tax residents outside these areas.
- A lowering of non-resident income tax for the period 2016 from 19. 5% to 19% for those non-residents who are tax resident in a country within the European Union, Norway and Iceland and 24% for tax residents outside these areas.
It is important to note that the amount of Spanish tax on rental income you pay as a non-resident is dependent on the country in which you are currently fiscal resident and not your nationality. There have been cases, for example, where British nationals have moved to a country outside the EEC. Consequently, their Spanish property is subject to heavier taxes. Furthermore, it is essential to keep abreast of developments regarding Brexit. To ensure you have a clear understanding of the potential changes, contact your solicitor.
What taxes do I have to pay in Spain as a foreigner?
There are two essential taxes in Spain for non-residents (your NIE number will be required): IBI (Impuesto Sobre Bienes Inmuebles) or council tax Imputed income tax or rental tax (in some cases a combination of the two).
What are the Spanish non-residents tax services for 2022?
What tax declarations must I make and how is the tax calculated? – It is necessary to submit Modelo 210 , as follows. Deemed income tax If the property has not been rented out during the year, then income tax on an “imaginary” rental income is due. The deemed income is calculated as a percentage of the rateable value (valor catastral) of the property. For the tax years 2015 onwards, this percentage is 1.
1% if the valor catastral has been updated in the previous 10 years, and 2% if otherwise. The tax rate is currently 19% for residents of the EU, Norway and Iceland. For residents of other countries,the tax rate is 24%.
If the property is rented out, tax returns are submitted on a quarterly basis. For EU Citizens, all rental expenditure (including mortgage interest) is tax deductible.