De Cotta Law would like to inform you that if you are non-resident in Spain and you are owner of one property then you are obliged to declare the ownership of your property in the tax area where the property is situated. The amount due to be paid must be lodged with the tax authorities before the 31st December of the year subsequent to declaration. The income tax is a personal tax. If a property belongs to two people, each one has to present a tax declaration separately.
In accordance to Spanish law on taxes for non-residents, all non-residents that have a property in Spain have to pay the Income Tax as follows:
a) Income from Lettings a 24% on the gross rent received – deductions now allowable.
PLEASE NOTE – A new tax law will allow non residents to offset some of their expenses when they are renting out their Spanish property. Contact Antonio Diaz on [email protected] for more details.
b) Deemed income on property utilised privately by the individuals is taxable also at 24% and assessed at 2% or 1,1% of the rateable value (Valor Catastral that is stated on the IBI receipt) depending on the municipality.
Income tax does not cover the full tax year but just the period of which you have been an owner.
There is no method to set up an automatic payment of Income tax, as it cannot be paid by standing order or direct debit as the taxpayer has the obligation to personally pay the tax by completing the necessary forms. Once completed, they have to be presented to the bank for payment.
De Cotta Law is qualified to be your fiscal representative in Spain notifying you annually of the requirement to pay taxes and on receipt of the necessary funds from you, the taxes will be paid and full receipts and fee notes issued.
In addition to above tax, other annual taxes that should be taken into account include Property tax (IBI – Council Rates) which is payable to the local authority. As in other countries, this rate is set locally, and so varies from area to area.
Please feel free to contact our tax specialist Antonio Diaz on [email protected] for more details.