Owning a property in Spain can be a dream come true for many non-residents. However, being a non-resident property owner also means dealing with taxes. One of the most important taxes you’ll need to be aware of is the Non-Resident Property Tax. In this blog post, we’ll guide you through the process of filing your Non-Resident Property Tax in Spain, including important deadlines, necessary documents, and helpful tips to make the process as smooth as possible.
Understanding Non-Resident Property Tax in Spain
The Non-Resident Property Tax (Impuesto sobre la Renta de no Residentes, or IRNR) is an annual tax that non-residents must pay if they own property in Spain. This tax is levied on the income derived from the property, whether it’s rental income or imputed income. Imputed income is an assumed income based on the property’s value that non-residents must pay even if they don’t rent out their property.
Determining Your Tax Liability
The amount of Non-Resident Property Tax you’ll owe depends on whether or not you rent out your property:
- Rental Income: If you rent out your property, you’ll be taxed on the net rental income (gross income minus allowable expenses). The tax rate for EU residents is 19%, while non-EU residents pay a 24% rate.
- Imputed Income: If you don’t rent out your property, you’ll be taxed on the imputed income, which is a percentage of the property’s cadastral value. The percentage is 1.1% if the cadastral value has been revised since 1994, or 2% if it hasn’t. EU residents pay a 19% tax on this imputed income, while non-EU residents pay 24%.
Deadlines for Filing Non-Resident Property Tax
Non-Resident Property Tax must be filed annually. For rental income, you must file quarterly declarations within 20 days of the end of each quarter:
- First Quarter (January – March): Deadline April 20
- Second Quarter (April – June): Deadline July 20
- Third Quarter (July – September): Deadline October 20
- Fourth Quarter (October – December): Deadline January 20
For imputed income, the deadline for filing is December 31 of the year following the tax year.
Required Documents for Filing Non-Resident Property Tax
To file your Non-Resident Property Tax, you’ll need the following documents:
- Personal identification: Your passport or other valid photo ID.
- Spanish NIE number: Your Spanish tax identification number.
- Property deed or rental contract: Proof of property ownership or rental agreement.
- Cadastral value certificate: A document that shows your property’s cadastral value, which can be found on your annual IBI (Impuesto sobre Bienes Inmuebles) receipt or requested from the local council.
- Income and expense documents: If you rent out your property, you’ll need to provide documents that show your rental income and allowable expenses.
How to File Your Non-Resident Property Tax in Spain
Filing your Non-Resident Property Tax in Spain can be done in the following steps:
- Obtain the necessary forms: You can download the relevant tax forms from the Spanish Tax Agency’s website (Agencia Tributaria). For rental income, use Form 210. For imputed income, use Form 210 as well, but with a different code.
- Complete the forms: Fill out the forms with the required information, such as your personal details, NIE number, property details, and the tax amount due. Ensure that you calculate the taxable amount accurately based on rental income or imputed income.
- Submit the forms and payment: You can submit the completed forms and make the payment at any Spanish bank authorized to collect taxes. You can also file and pay electronically through the Spanish Tax Agency’s website using a digital certificate.
- Keep records: Make sure to keep copies of your filed tax forms and supporting documents for at least four years, as the Spanish Tax Agency may request them for audit purposes.
Working with a Spanish Real Estate Lawyer
Filing your Non-Resident Property Tax in Spain can be a complex process, especially for those unfamiliar with the Spanish tax system. Hiring a Spanish real estate lawyer can be beneficial in ensuring that your tax filing is accurate and compliant with the law. A lawyer can help you:
- Understand your tax obligations as a non-resident property owner in Spain
- Gather the necessary documents and complete the tax forms correctly
- Represent you before the Spanish Tax Agency in case of disputes or audits
- Keep you updated on any changes to the tax laws that may affect your property
Frequently Asked Questions
Can I claim tax relief on my Non-Resident Property Tax in Spain?
Yes, EU residents can claim tax relief on their Non-Resident Property Tax if they have double taxation treaties with Spain. Consult with a tax professional or real estate lawyer to determine your eligibility.
Do I need to file Non-Resident Property Tax if I only own a small plot of land in Spain?
Yes, owning any type of property in Spain as a non-resident, including land, makes you liable for Non-Resident Property Tax.
Can I file my Non-Resident Property Tax in English?
The official tax forms are in Spanish. However, you can find unofficial translations of the forms online or seek the assistance of a real estate lawyer who is proficient in English.
Can I deduct mortgage interest from my Non-Resident Property Tax?
No, mortgage interest is not deductible for non-residents when calculating their taxable income for Non-Resident Property Tax purposes.
