Another property tax?

I am a non-resident and have a house on the Orihuela Costa. I pay SUMA which I understand to be council tax every year but someone has told me that I should also be paying another tax. Does anyone know what this is? I’ve had my house for two years and I’ve never received any other kind of tax bill. I always try to do things right and I don’t want any unpleasant surprises! I just think I’ve done everything I need to and then something else comes along. This is my first post and I would appreciate some help.

You should also be paying  non-resident income tax which is a deemed tax calculated off your rateable (catastral) value.

Lots of info on this site all about that.

It's all self assessment - the tax office do not send you the forms etc

Hi John

I think I might be able to help you. As I understand it there is another income tax that you have to pay as a non-resident. It’s something to do with the fact that even if you’re not renting out your property you could be and so you have to pay some tax in lieu. I’m not an expert but I found this article ‘Spanish taxes guide’ on the AbacoConnect website whilst checking on my own situation.

Hope it helps. 

 Thanks for your answers. I'll have a good look around this site and at Abaco. I'll get there in the end!

or check out www.spain214.com

they reply to some forum posts and also fairly cheap if you don't go the DIY route

It's renta tax, I have to pay it like ALL non residents. Search out posts by LESWILL who will do it for you for £50 per property (covers two owners as each need to submit their own).  

Click on her weblink http://spain214.com/default.aspx  (the form is called 210 these days, was 214).

And just to clarify, before the usual shouts of discrimination against foreign property owners start, it's applicable to ALL owners of second homes (i.e. any property other than your habitual residence) in Spain, whether resident or not. Non-residents use a different form, that's all.

 Hi JohnF55

If you haven't been paying taxes and you have owned for 2 years, please bear in mind that you may also be liable for Wealth Tax for the tax year 1st Jan 2007 to 31st  December 2007 at which date it was abolished.

When did you sign your Escritura?

From 1st Jan 2008, you would only have been liable for La Renta, which was the cheaper tax out of the 2 so that's a bonus!

Click the link below my signature for further information.

kind regards,

To be perfectly honest this is more of an optional tax in that some pay it and some don't and when some do they just pay it for the most recent year and ignore back years.

The tax office keep saying they will chase up all us non-resident property owners but so far I have not heard of anyone being chased.

The only time the tax office pick up on outstanding tax returns is if you sell and submit a claim for a refund of the capital gains tax retention.

Some will no doubt disagree with this view.

 I disagree Faro, it is not an optional tax, every non resident is liable to apy it.

It was brought in because, people that did own and rent out their property for profit, were not declaring the income, hence not paying tax on that income.

So, the law was changed to make ALL non resident owners liable for La Renta, whether they rented their property out or not.

When you sell your property, you must show that all taxes have been paid up to date on it, this will include La Renta tax.

So, if you pay these taxes yourself, hold onto all your stamped 214/210 forms as proof.

We don't need a lesson on the law.

I'm just telling it as it is in practice!

How many non-resident property owners actually pay it - probably 50%

How many people rent and don't declare the rental income - probably more like 75%

I have never come across anyone receiving a demand unless like I said applying for a CGT refund when the tax office look for any reason not to process refund.

Maybe one of these days they will learn how to use their database but until then I wouldn't worry about it.

At the same time we could talk about all the people in Spain who should be tax resident and are not.

Spain is a frontier - it's the wild west - there are no rules.

And I stress again, even if you are a resident, if you own more than one property, you are liable for imputed income tax on all but your main home. The original poster stated that he likes to do things properly, and the suggestion that any tax is "optional" should be treated with caution. By the same token it could be said that obeying any law is optional, and as long as you don't get caught, there's no need to worry. Hmmm.....don't even get me started on un-taxed foreign registered cars.

 I wasn't giving a lesson on the law Faro!

Merely stating the facts so people are informed correctly

If they choose to ignore the law, that's up to them.

Hello John, the answer to your question is that if you bought your property in 2008 you should submit a non resident tax form for 2008 (this should have been submitted and paid by end December 2009).  You will need to submit non resident tax form for 2009 by the end of December this year.  There certainly are a number of people who should be paying this tax and have not done so to date.  There are many who are currently 'getting away with it'.  There are others who have received demands for unpaid taxes plus fines.  Realistically can you expect to avoid the tax office for ever?  If you want to do things properly have a look at my website which a couple of other members have already kindly highlighted in this topic.  www.spain214.com

Yeah - that's a fairly balanced view.

One of these days the tax office might turn their attention to non-resident property owners and more so to those who are in fact resident but then I think it's a double edge sword and these people live here and mostly spend foreign earnings.

Leswill - have you come across any cases where for no reason at all a tax demand/assessment has been issued for not submitting a non-resident tax return?

I think if you rent then you run a higher risk?

In answer to Faro's question, I personally have come across just a couple of people who out of the blue received fines that were issued in 2008 for tax dating back to 2004. The fines comes in the form of a letter from the tax office advising that there is a notification for you at your local tax office, giving 14 days to collect. When attending the tax office a notification is given, giving you the option to agree or disagree that you are liable for the fine.  If you agree papers are issued allowing the fine to be paid within a certain timeframe.  If you disagree you need to state your case within the same time frame.   If there is nobody at the property when the initial letter is trying to be delivered  the notification will then be placed in the Official Bulletin and from the tax office point of view they consider that you have been advised of the fine in this way.  This Bulletin is used throughout Spain to make official announcements on a daily basis and naturally is in Spanish.  I have pasted a link to the Alicante bulletin for those of you whose Spanish is up to it - you will see it is used by town halls, courts, tax offices etc to advise of fines, unpaid bills etc. etc. http://seguro.dip-alicante.es/  I suppose this highlights the fact that  for many people who think they have not received a fine, this may not be the case..  I keep an eye on this Bulletin just as a matter of interest to see what is happening and can assure you that there are regularly notifications relating to English names from the local tax office.  The Spanish tax office consider it your responsibility as a non resident to submit your tax return and to check the Official Bulletin to keep up with notifications that relate to you. 

 Leswill

Am I right in saying that people renting a property, fill in some kind of tax form that gives the owner's details?

This then alerts the tax office to the owner who is liable to pay the La Renta tax

I am sure I read that somewhere.........

This would be another reason not to avoid paying La Renta

If you are renting out your property and signing rental contracts then you are more at risk as you have no idea where the tenant will produce the contract.

You're basically relying on one department not speaking to the other and then fact that Spanish addresses are fairly vague (unless you details the castral ref no etc)

and of course then the outstanding taxes and penalties will be much higher!!!!

For normal non-resident "deemed income" tax returns the tax payable is not that much and that means likewise the penalties and interest and then of course you probably save on professional fees.

It's like your AA membership - most people would be quids in if they never paid it and just paid a callout charge if they broke down!

But some people want to pay all their taxes and not worry about a tax demand coming .....

Thanks roberto and leswill for taking on board that in my original post I expressed that I want to do the right thing.

I’m not interested in ducking and diving and avoiding my Spanish tax obligations as I am sure they will come back to haunt me at the worst possible time. If it is anything like the U.K. catching tax evaders is going to be high on the government agenda in the coming months to keep the country afloat.

Thanks also to rboyle. I have been on the AbacoConnect web-site and found a section specifically for non-residents "Non Resident Taxes in Spain" which sums it all up perfectly.

But we do like to debate all options - keeps the forum interesting!