Property taxation for non-residents

You may be a foreigner and have decided to buy a property in Spain, for example, a house on the beach to spend your holidays in the sun. If so, you should know that you must pay the Non-Resident Income Tax (IRNR) and the Real Estate Tax (IBI). We tell you what non-resident taxation consists of and what you should do.

What is the Income Tax for non-residents?

This is a tax that is regulated in the Non-Resident Income Tax Law</a > and which taxes the obtaining of income in Spanish territory by individuals and entities that do not reside in Spain.

Ownership of a property and IRNR

If you do not live in Spain and you own a property in Spanish territory, two situations may arise:

• That you use it for yourself, that is, you go on vacation to your apartment and do not rent it. In this case, the return declared is the amount that results from applying a percentage to the property’s cadastral value that appears on the receipt of the Real Estate Tax (IBI). The percentages will be the following:
  • Accruals until 2014: 2%, in general, and 1.1% for properties with cadastral values ​​revised as of January 1, 1994.
  • Accruals since 2015: 2% in general and 1.1% in the case of properties whose value has been reviewed and has come into effect in the tax period or the ten previous tax periods.

The presentation can be done electronically or on paper by printing the Tax Agency form 210. The filing deadline is until December 31 of the following year.

• That you dedicate the property to rental. In this case, you must declare all the income you receive from the tenant without deducting any expenses, unless it is a taxpayer who resides in a State of the European Union, who may deduct expenses if you prove that they are related to the income obtained. The tax rate, starting in 2016, will be 19% for residents of the European Union, Iceland and Norway and 24% for other taxpayers.

The presentation may also be electronic or on paper and using form 210. The filing period will depend on the result of the declaration:

• To enter. Between April 1 and 20, July, October and January.
• Zero quota. January 1 to January 20 of the following year.
• To return. Starting February 1 of the following year.

Other taxes: IBI

The Real Estate Tax is a local tax paid to city councils by urban real estate owners. To calculate this tax, the cadastral value established by the administration is considered, and a type of tax (percentage) is applied. The payment deadline depends on each municipality, but generally, payment is made during September, October and November.

In some cases, it is possible to make deferred payments and obtain bonuses.