Once you have bought your property in Spain we feel that we have to inform you about the taxes related to this purchase.
There is one local tax payable to the Town Hall of the city, town or village where your property is located and that it is automatically calculated by it, and it is called IBI or contribución. You only have to be aware of receiving the letter of payment first year and from years on set a direct debit to pay it at your bank. This tax is paid by resident and non-resident.
But there is another tax paid to the State called Tax over Non-Residents´ Revenues that is not automatically calculated by the State. You have the obligation to fulfil the tax form and pay it.
Revenues involved
What revenues have to be declared at this tax? The following:
- Economic activities
- Personal work
- Interests paid by banks operating in Spain from your non-resident accounts
- Dividends
- Gains from selling properties
- Holding the ownership of a property in Spain: this is a fictitious revenue established by the law and probably will be the normal reason why you have to make your tax declaration of non-resident.
How much should I pay?
How much tax should I have to pay in the holding of owner ship of a property in Spain?
The fictitious revenue that comes from this ownership is estimated by law in a 1.1% over either 50% of the price of purchase or the valued given by the Town Hall and over that amount 24% tax.
For example: a new property bought for 286.000 €. 50% of the price is 143.000 €, 1.1% of this amount is the fictitious revenue: 1.573 € and the tax payable is 24% o/1.573 € so the final figure is 377,52 €
And for Heritage Tax this year, this tax has been abolished, so you won´t pay anything for it.
Usually, according with British-Spanish Treaty to avoid double taxation, if you are charged back in the UK for similar taxes that would include these revenues, you could deduct back there what you have paid here in Spain, check with your tax advisor back in the UK.
Term to pay and fulfil the tax declaration
The term to fulfil and pay the tax is from January the first upto December the 31st of the following year the revenue is referred to. Form 210 (former form 214)