A lot of people find it difficult to understand that they have to pay non resident income tax when they are not actually renting their property out, but the fact is that all non residents who own a property in Spain have to present a non resident tax returns and pay some tax even if no income exists. The question below is asked all the time so for everyone’s peace of mind this is the answer:
Q. After reading the article about the obligation to pay non-resident income tax and accepting that it is obligatory, could you explain how on earth they calculate the tax due if there is in fact no real income ?
A. This is a frequently asked question and I am not surprised.
The calculation is made in the following way:
The tax office considers that your hypothetical income is 1.1% of the catastral value of your property (you will find this on your rates bill). You are then taxed at 24,75% of the resulting figure. If you do not have a rates bill (this is frequently the case on recently built properties), then we take 1.1% of half the value on the title deed and then apply 24,75% to the resulting amount.
Please note that if what you own in Spain is only a piece of land or a property under construction, this tax is not due.
SMALL NOTE ON WEALTH TAX
Wealth tax is different in the different regions in Spain and is prone to change every couple of years.
In Andalucia at the time of revising this post 2021 wealth tax is due by residents on the net value of their wealth above 700000 euro with an allowance in relation to the main home.
In Andalucía for non-residents the wealth tax only affects you if your assets in Spain (Andalucía) are worth in excess of 700000 Euros.”
For other regions of Spain please contact us as each region is different.
As mentioned above wealth tax in Spain has been up dan down over the last 20 years and it is likely to change again in the future.
Michael Davies.
Abogado.
Member 2424 of the Probate section of the British Law Society.
Member 1748 of Almería Law Society.
Member 67228 of Madrid Law society.
Ex. Honorary British Consul to Almería.
Michael Davies is a Spanish Abogado specialised in inheritance and has been practicing law in since 1994. He is member of the Law societies of Almería and Madrid and has offices in Mojacar , Marbella and Almeria high Street.
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