When you purchase a property in Spain you you need to be informed of your tax obligations.

The non-resident property tax (Impuesto Sobre la Renta de no Residentes) is a tax based on property in Spain for non-Spanish residents.

Its calculation depends on your use of your property: rental to others or personal residence .

If you do not rent your property, the Spanish tax authority shall charge an imputed income on real estate for own use. This amount considered as income results from the application of a percentage to the assessed value of the property, which is indicated in the IBI , the counsel Spanish tax.

If a property is rented, then income tax must be paid on the gross amount of rental income received at a percent fixed. Although since 2010, EU residents have been permitted to deduct allowable expenses, all costs relating to rent ( property taxes (IBI ) , the community owners fees, garbage collection tax , etc.)

Only the owners registered as landlord in the Tax office have allowed to deducted the metioned expenses from the income imputed when they declared their taxes.

Furthermore, Andalusia approved on the 3rd of February a new decree, this new law will be applied for the renting less two months, offered and promoted in tourism channels, for tourist purposes and provided for a price. All landlords that wish to rent out their properties in Andalusia must register their property  from the 11th of May 2.016 onwards.

As there have  been problems in the past and still today that many people are simply unaware of their financial responsibilities, the Spanish Tax Office is checking all taxes to be paid, and if the owners are late paying, they are charging  an interest rate, and it will keep increasing until paid, interest and penalties will be depending on the severity of the case, between 50-150% of the tax amount.

In order to avoid unpleasant surprises, the owners of a property in Spain have to be updated in all taxes. They have to avoid to wait the Taxman to knock on their doors with a penalty proceeding against them.

We suggest to use this information, in case that you have any require, or need help in this matter do not hesitate to contact us.

Marisela Castro

Real Estate lawyer