Did you know that if you own a property in Spain, even if you’re a non-resident, you’re still obligated to file a Modelo 210 tax return to the Spanish tax authorities?
Unfortunately, there’s no guidebook when it comes to buying property in Spain, leaving many property owners completely unaware of their tax obligations in Spain. Some property owners have even gone years without paying them at all.
However, the Spanish tax authorities are now catching up with such owners, issuing demands for payments, as well as fines for non-payment. A potentially hefty bill, with just 10 days to pay up, is something none of us want to see happen, so it’s important to be aware and remain in good standing with the tax authorities.
In this article, we’ll be looking at the types of property taxes in Spain that non-residents can expect to deal with, and why, with expert advice, there’s no need to worry about them.
What do I need to pay if my property remains empty all year?
Whether your property is solely for your own personal use, or if it remains unoccupied throughout the year, the Non-Resident Imputed Income Tax is applicable. This tax must be filed annually by 31st December, for the previous year, through the Spanish Tax Form Modelo 210 and submitted to the Agencia Tributaria (the Spanish tax authorities).
To calculate this tax, you’ll need to take the cadastral value, multiplied by the imputed percentage and tax rate. The cadastral value of your property can be found on your local tax receipt (IBI or SUMA), by contacting your local town hall, or through www.sedecatastro.gob.es. The imputed percentage varies between 1.1% and 2%, depending on the municipality.
If a property has multiple owners, each co-owner must file their tax return separately, with the total tax amount divided based on the individual’s ownership percentage. Find out more about IMPUTED INCOME TAX.
If I rent out my property in Spain, what taxes do I need to pay?
Non-Resident Rental Income Tax is levied on non-resident property owners who earn a rental income from their Spanish property. This tax must be filed every quarter (January, April, July, October) for the previous quarter, through the Spanish Tax Form Modelo 210 and submitted to the Agencia Tributaria (the Spanish tax authorities).
For individuals owning property jointly in Spain, separate tax returns for each owner must be submitted. Each co-owner needs to report their share of the property, and then the total tax amount is divided according to the ownership percentage of each individual, minus any associated expenses that can be written off against the rental income earned.
If your property remains empty for certain periods, you’ll need to declare these days on your annual Imputed Income Tax return. Find out more about RENTAL INCOME TAX.
Selling your property in Spain? You’ll need to submit a return for your Capital Gains Tax too
If you’re looking to sell your property or land in Spain, you’re also obligated to report and pay taxes on any profit earned from the sale.
The tax rate for capital gains currently stands at 19%, and this rate applies uniformly, regardless of the taxpayer's residency status. The deadline is fixed at 4 months from the sale date, allowing sufficient time to gather all essential information and documents necessary for reporting.
Regarding Withholding Tax on Capital Gains, when a non-resident property owner sells their property in Spain, the buyer is required to retain 3% of the sale price. This amount is held to cover the seller's Capital Gains Tax. The buyer deducts this sum from the sale price and remits it directly to the tax authorities.
The seller must declare this withholding tax in their Capital Gains Tax return and align it with their final tax liability. If the computed Capital Gains Tax surpasses the withholding tax, the seller is required to remit the difference to the tax authorities. If the withholding tax exceeds the tax owed, the seller can claim the surplus back from the tax authorities. FIND OUT MORE ABOUT CAPITAL GAINS TAX.
IberianTax… non-resident property tax made SIMPLE!
Many non-resident property owners in Spain enlist the help of an accountant or gestoría, often paying hundreds of euros to submit their taxes on their behalf – even though their fees are greater than the tax itself!
After years of assisting non-residents with their Spanish tax obligations, we saw the need for a more accessible and affordable solution. So, we developed IberianTax, an online tax preparation service that’s been tailor-made for non-residents in Spain, aimed at making the Modelo 210 submission simpler and more affordable than ever. In fact, we’ve made it so simple that even if you’ve never submitted a Spanish tax return before, you’ll be able to prepare and send your Modelo 210 quickly and easily to the authorities with minimal hassle. You can even do it all from the comfort of your own home – and, most importantly, without those extortionate accountancy fees.
All you need to do is complete the questionnaire with our step-by-step guidance, and our team of tax experts will calculate your tax for you. Then, you simply choose how to pay, and we’ll submit your Modelo 210 directly to the Spanish tax authorities – it couldn’t be easier.
Safe and secure payment of your taxes
Your online security is of the utmost importance to us, so we provide secure payment options like direct debit and bank transfer, as well as offering you the ease of e-filing your non-resident tax from anywhere, at any time. Whether you're in Spain or abroad, the process is hassle-free and convenient with IberianTax.
Approved and recognised as collaborators of the Agencia Tributaria, we cater to various non-resident tax requirements, including Imputed Income, Rental Income, and even Capital Gains Tax.
The best part? IberianTax's pricing begins at a remarkably low 34.95€. Yes, you read that right. Filing your non-resident taxes with us starts at just 34.95€. Don't let your Spanish non-resident taxes become a source of stress. IberianTax is committed to streamlining the process, ensuring it's not only cost-effective but also secure.
A rewarding service
IberianTax has also recently introduced its own referral programme – all you need to do is simply share your unique referral link with your friends, neighbours, or anyone who could benefit from our tax filing software and when someone signs up and completes their first submission, you’ll earn 10€ credit as a reward! You can refer as many people as you like and keep earning credit, which you can use to offset your filing fees! Plus, each person you refer will also receive 10% discount on their first submission, so everyone’s a winner!
Thousands of people are already enjoying the simplicity and savings of filing with IberianTax, so why not sign up for FREE today and take your first step towards a hassle-free tax filing experience?