Non Residents Property Tax Spain?
- Víctormanuel Paz
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.
Does Spain have yearly property tax?
Depending on your situation in Spain, you’ll be liable for various types of tax. You’ll pay sales tax on day-to-day items and durable goods that you buy. If you own a property, you’ll owe annual property tax (and some income tax, even if you are a non-resident). And if you live full-time in Spain (or at least 183 days a year as a resident), you should file an income tax return in Spain and may possibly owe income tax.
- Sales or Valued-Added Tax (VAT) is called IVA ( Impuestos sobre Valor Añadido ) in Spain;
- The current standard rate is 21%;
- However, some goods are actually taxed at a lower rate;
- A reduced IVA rate of 10% is charged for transport of passengers (such as rail and bus fares), taxes on the renovation of a property, and for admission to cultural, sporting, and entertainment events;
An even lower rate of 4% is charged for newspapers and basic foodstuffs. Annual Property Tax: Property taxes, officially known as Impuestos sobre Bienes Inmuebles and unofficially as predial , in Spain are generally midrange. They’re set by the local provincial government, and the rates vary— depending on the province—from about 0.
- 00405% to 0;
- 01166% of the cadastral value of the property;
- (That is, from under half of 1% up to just over 1% of a property’s cadastral value;
- ) Cadastral value ( valor catastral ) is the official property value listed in the municipal property records—and it’s often much lower than a property’s actual market value;
Under the rates given above, a house with a valor catastral of €100,000 ($123,000) would mean annual property taxes between €405 and €1,166 ($498 and $1,434) a year, depending on what province the property is in.