What taxes do I have to pay as a non-resident in Spain?
If you own or have previously owned a property in Spain without becoming a Spanish resident, you are liable to pay non-resident income tax as well as the local council tax. In this article I will quickly explain the different types of taxes you will come across when buying a property in Spain as a non-resident.
Imputacion de Renta (Non-Resident Tax)
This tax is applicable to those who as non-Spanish residents own a property in Spain and use it for either personal use or holiday rentals. This tax must be paid each year and is calculated as follows:
- 2% x the cadastral value of your property
- 1% x the cadastral value if this value has been revised/modified within the past 10 tax periods
- If the cadastral value of your property is unknown or has not been notified to the taxpayer, the 1.1% will be applied on 50% of the greater of the following values: the value stated by the Administration to effects of other taxes or the price/ consideration or value of the acquisition.
Impuesto del Patrimonio (Wealth Tax)
Wealth Tax is applicable to those with assets in Spain that amount to over 700.000€ this has recently been reduced to 600.000€ in the Comunidad Valenciana. The declaration of this tax should be made regardless of whether you are a Spanish resident or not. If you own an asset in the Valencian Community, the first 600.000€ of the assets is exempt. For example, if you own an asset worth 2,000.000€, you will only pay tax on 1,400.000€. (2,000.000€ – 600.000€ = 1,300.000€).
Following the previous example, the tax you will have to pay on the 1,300.000€ will vary between 0,25% to 3,12% – this only applies in the Valencia Community (the tax % varies in different areas in Spain.)
Ganancia de Capital (Capital Gains Tax)
Capital Gains Tax applies to those who have recently sold a property in Spain. This tax is calculated based on the difference between the purchase price and the sale price. If you have made any profit on your house sale this will be taxed at 19%. Payments made in advance will be deductible, for example, 3% paid by the Tax Form 211.
If you were to sell your property in Spain as a non-resident the lawyers of the buyer will retain 3% of the property sale price this will be paid to the tax office.
You as a vendor should receive a stamped copy of the Modelo 211, this document acts as a receipt of payment of the 3% tax, you can then deduct this amount taxed from the Capital Gains Tax due. If the 3% tax retained is greater than your Capital Gains Tax you will be refunded with the difference.
Plusvalia (Tax on the Increase in Value of Urban Land [IIVTNU])
This tax is often mistaken with Capital Gains Tax however they are two separate and different taxes. Plusvalia is a local tax which is regulated and implemented by each townhall, due to this the rate can differ depending upon where the property is situated. This tax is calculated upon a mix of the following factors:
- The location of your property (Guardamar, Ciudad Quesada, Torrevieja…)
- The size of your property (m2 of the plot/build)
- The Cadastral Value of your property
- The number of years you have owned the property
IBI (Council Tax)
This is a local tax which is paid to the town hall related to where your property is located. This tax is paid by residents and non-residents. This tax is calculated by the cadastral value of your property and the tax rate which has been established by the local council. This tax is usually payable during the months of September/October/November each year.