Taxes in Spain: What do property owners pay in this country?
Whether you are a Spanish resident or not, you will have to pay property taxes in Spain. The only difference will be in the amount of these taxes. And it is important to understand the difference between administrative and tax residency.
Who is considered a tax resident and must pay taxes in Spain in full? These are:
- individuals who are in the country for more than 183 days a year;
- individuals whose main sources of income are in Spain.
As a tax resident, you are required to pay income tax, known as I.R.P.F., regardless of the location of your property or where you live.
What if you have already paid a similar tax in another country? You need to present supporting documents. In this case, the tax authorities will make a corresponding deduction in the amount of the amounts already paid.
However, if your property is located in Spain, taxes on it must be paid in that country. This fully applies to real estate taxation.
It is worth noting that an administrative resident is not always a tax resident. For example, this applies to persons who have a Spanish residence but receive their livelihood in another country and pay taxes there.
For this category of persons, the main payments are established, such as income tax (I.R.P.F.) and property tax (I.B.I.). It is important to note that I.B.I. is a municipal tax, so its amount can vary significantly depending on the area in which it is paid.
The amount of property tax in Spain is calculated based on the cadastral value of the property for which it is paid. Payment deadlines are also set at the municipal level.
It is possible to reduce the amount of this tax, since when purchasing real estate for permanent residence, the owner has the right to certain deductions.
Non-resident tax residents who own real estate in Spain are required to pay income tax on this real estate to the Spanish state. If the property is used personally by the owner, the tax is set at 24% of 2% of the cadastral value of the property.
Tax residents are entitled to deductions in the event of leasing property.
Taxes on rental income from Spanish real estate for non-residents are 24% and must be paid quarterly. There are no benefits for this category of taxpayers under the current tax laws in Spain.
Those who do not want to have problems with the Spanish tax authorities, but cannot be in the country in person and pay taxes, can appoint a representative or authorized person. After notifying the tax authority about this, you can not worry about paying taxes on time and sleep peacefully, as they say in the famous advertisement.
