If you own a property in Spain, you’ll have to pay certain taxes. This applies whether you are a resident or not. We talk you through the property taxes you may have to pay when you become a Spanish homeowner.
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Unlike the UK, the Spanish tax year runs from 1st January to 31st December. You must complete a tax return each year; this must be made between 1st May and 20th June of the following year.
Non-Resident Imputed Income Tax
All homeowners in Spain, whether resident or not, must pay what is known as Non-Resident Imputed Income Tax. This must be paid even if you do not rent out your property as it is based on your ‘presumed rental income’. This is a fixed percentage (usually 1.1%) on the cadastral value of your property. EU citizens will pay 19% tax on that amount, while non-EU citizens will pay 24%.
If you do rent out your property, you must pay a slightly different tax, called Non-Resident Income Tax, on your gross rental income (19% for EU citizens and 24% for non-EU citizens). Do be aware that you will still have to pay Non-Resident Imputed Income Tax on the days that your property is vacant.
IBI (Impuesto de Bienes Inmuebles)
This tax is like council tax in the UK. The money goes towards maintaining the streets, the education system, and local amenities.
How much you pay is determined by your local town hall.
Waste collection and drainage (basura y alcantarillado)
This tax goes towards waste collection and drainage.
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If your Spanish assets amount to more than €700,000 you must pay this tax. This is the case for both residents and non-residents, and the amount is set by the region your assets are in.
Transfer tax (ITP and AJD)
ITP and AJD are two taxes you pay if you transfer ownership of a second-hand property in Spain. It varies between 4%-10% depending on the region.
Also known as succession tax, you pay this tax when a Spanish property is inherited after the owner passes away. Again, the amount varies by region.
Capital gains tax
This is set at a flat rate of 19%. You pay this on any profit you make when you sell your Spanish property.
Plusvalía is the tax applied to the increase of the value of the urban land once a property is transferred, sold, inherited. Note that this tax is ONLY on the increase in urban land value, so, if your property is in the countryside, you will not have to pay this tax.
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