Do I have to make a non-resident tax return?

The mind field that is Spanish taxes can seem complicated and boring, right? In this post, we are going to explain it as clearly as possible! Many of our clients have benefited from using our services for their non-resident tax returns, and so could you – Let’s get right to it! 

Do I have to make a non-resident tax return?

First things first, are you a Resident or a Non-Resident in Spain?

An individual is deemed a resident when they have lived in Spain for more than 183 days a year and have registered at the Oficina de Extranjeros. HomeFinance Spain can help you become a Spanish Resident.

If you are only living in Spain temporally, then you are a non-resident.

What property taxes do non-resident property owners have to pay?

Non-residents must pay two property taxes;

  • IBI/council tax (impuesto sobre bienes inmuebles).
  • Imputed income tax/rental tax.

What is the IBI tax in Spain?

IBI is a council tax that property owners in Spain must pay. It is paid to the town hall annually and is based on the value of your property.

What is the Spanish rental tax?

Simply put, if you rent out your Spanish property, then you have to pay a rental tax.

Do I have to pay income tax in Spain?

Yes, the income tax must be paid by non-resident property owners who do not rent out their Spanish property, as they do not pay the rental income tax. The logic behind this is that property owners could rent their Spanish home if they wanted to.

What is the imputed income tax?

  • The imputed income tax is for second homes which are not rented out.
  • It’s paid to the Spanish Tax Authority.
  • It’s declared on the non-resident annual tax declaration.

What is the system for paying taxes in Spain?

The system for collecting taxes in Spain is different to some other European countries. It is the taxpayer’s responsibility to make sure the tax is paid, and you will not be reminded that you owe tax. However, if you avail of our services we will remind you. If you have overpaid on your taxes, you must have this settled before you sell or inherit the property.

What if I don’t make my Spanish Tax Return?

If you do not make your Spanish tax return you can be liable for fines for late payments or incomplete tax returns. If you do not pay the appropriate taxes, the debt can be held against the property until it is sold. You may also be liable to pay interest as a penalty on the debt.

The Spanish Tax Authority is becoming increasingly vigilant in ensuring everyone pays this tax. They monitor the property’s electricity consumption and compare it to the details you have registered on the land registry.

My partner and I own the property, can we make a joint tax return?

No, each owner must make a separate tax return, you are unable to make one for joint property owners.

How can I manage my tax returns as a non-resident in Spain?

We recommend that non-residents in Spain have a fiscal representation. HomeFinance Spain will:

  • Ensure your non-resident taxes are paid on time.
  • Send you notifications on your taxes.
  • Represent you to the Spanish tax authorities.
  • Answer any questions that you might have.
  • Inform you of changes on tax laws.

Over to you...

We hope that after reading this post you have a better understanding of non-resident Spanish taxes. If you find the process difficult and time consuming, we would like to offer our tax services to help!

For more related information on these types of services – see Conveyancing in Spain or Spanish Residency.

HomeFinance Spain can complete your Spanish Non-Resident Tax Return.

If you would like to avail of our tax return services, our team of specialists are here to help. 

Get in touch today by filing the form provided or call us on (0034) 96 682 11 72.

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  • Non Resident Mortgages
  • Resident Mortgages

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