Tax obligations of urban properties owned by Non-Residents natural persons

obligaciones tributarias
Tax obligations

If you do not reside in Spain but you have a property here, either as an investor or as a second residence, you are interested in reading this.

1.- General considerations

If you have the status of Non-Resident in Spain and you own an urban property located in this country, you will be subject to the Income Tax on Non-Resident (IRNR-Impuesto sobre la Renta de No Residentes) and a local tax, the Real Estate Tax (IBI-Impuesto sobre Bienes Inmuebles).

In addition, on a temporary basis, the Wealth Tax (IP-Impuesto sobre el Patrimonio) has been restored.

2.- Non-Resident Income Tax. IRNR

Depending on the destination of the property, the income subject to taxation are:

2.1. Income imputed from urban real estate for own use.

It comes in the case of having a property for own use or second residence, even if it is not used.

This performance is understood to accrue once a year, on December 31.

The proportional part of said amount will be declared if you have not owned the property during the whole year or if it has been leased for some period of time.

Deadline: throughout the calendar year following the accrual date.

Direct debit of the payment of the tax debt: in case of electronic filing, the payment may be domiciled until December 23.

2.2. Leased real estate returns

Residents in another Member State of the European Union (EU) for the determination of the tax base may deduct the expenses related to obtaining the income. The yield is taxed 19%.

If you are not a resident in the EU, pay taxes on the full amount received without deduction of expenses, pay 24%.

The declaration period is  quarterly.

 Deadline for submission: If the result to be entered is domiciled the settlement is presented the first 15 calendar days of the months of April, July, October and January, in relation to the incomes of the previous quarter.

 2.3. Landlord

If you are a Non-Resident and you rent a business premises of your property and the tenant is obliged to withhold (eg an employer or legal entity) you will bear the corresponding withholding but do not have to file an IRNR statement.

3.- Wealth Tax. IP

Non-residents in Spain who, on the accrual date, on December 31 of each calendar year, are holders of goods and rights located in Spanish territory, the value of which exceeds the minimum exempt value established by law, will be required to file a declaration for the real obligation tax.

The minimum exempt value in general is 700,000 euros. In Catalonia they are € 500,000.

The deadline for the presentation of the declaration is during the months of April to June of the calendar year following the accrual.

4.- Value Added Tax. VAT

In the case of leasing premises, or properties with destination other than housing, to the rent agreed with the tenant, VAT must be added to the general rate of 21%. This VAT charged and received together with the rent by the landlord must be submitted and paid quarterly with similiar periods to the IRNR. The VAT paid on thoses expenses directly related to obtaining income may be subtracted from the amount to be paid.

You may need a Tax Lawyer.

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