What Taxes Do Non-Residents Pay on Properties in Spain

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taxes on Spain real estate

In Spain, there is a distinction between a resident and a non-resident for the time he or she lives in Spain. A non-resident foreigner is a foreigner who lives in Spain for less than 6 months (183 days). If you are a non-resident and owner of a property in Spain you will have to pay the Non-Resident Income Tax (IRNR) and the Real Property Tax (IBI) (local tax).

Non-Resident Income Tax in Spain (IRNR)

Income derived from real estate. This tax must be paid “Non-resident taxpayers who are natural persons, holders of urban properties located in Spanish territory, used for their own use not affected by economic activities, or empty, are subject to the Non-Resident Income Tax for the imputed income corresponding to those properties “. The general tax rate of the IRNR has been reduced in 2016 and 2017 for those taxpayers who reside in another member of the European Union, Iceland and Norway and has remained at 19%. While for the rest of taxpayers the IRNR tax rate is 24%.

In order to pay this tax you will have to fill in Form 210 in your 2016 Nonresident Income Tax Return. The IRNR is paid during the calendar year and referred to the previous one. That is, in 2017 you pay the 2015 IRNR.

Tax on Real Estate in Spain (IBI)

The IBI is a local tax that must be paid to the town councils for having a property in their municipality. All properties located in the same municipality are registered in the census with their corresponding value, which is called cadastral value. The cost that you will have to pay corresponding to this tax is determined by the cadastral value of your property and the type of tax that the municipality establishes.

The IBI is normally paid, although this varies according to the municipality, around the months of September, October and November. The municipality issues a receipt each year for each property registered in the census, in which the amount to be made is specified. Also, they set payment deadlines and usually provide an account number where you can make the payment. You can also pay at the offices of SUMA.

Also, in addition to the IBI you will have to pay the garbage collection fees and the waste treatment fee. These are fees that are also paid to the municipality where the property is located. Normally, they can be domiciled in the bank account if it is communicated to the town hall.

Finally, remember that if you do not pay one or both taxes, you will be sanctioned and will have to pay interest for each day of late payment. The bank account can be seized and you could also be accused of fraud. Therefore, we recommend that you inform yourself well and make the payment during the set deadlines.

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