When you become an owner of a property in Spain you will automatically have tax obligations from the following year to the one in which you acquire your property. I.e. if your title deeds are signed along 2015 you will start being taxed on 2016.
There is a differentiation between Residents and Non-residents in Spain. You only must become a resident from the Fiscal point of view when living in Spain for more than 183 days per year.
When owning a property as a holiday home there will be two taxes to pay:
- IBI (IMPUESTO SOBRE BIENES INMUEBLES) or Local Rates. Tax payable to the Local Tax Authorities that in the Valencian Community is known as SUMA. In other areas of Spain the IBI may be dealt with by different organisms created to those effects and with a different name.
This tax is based in the rateable value (Cadastral value) of the property that differs to the acquisition price, and will be assigned to the property through a complex administrative process based on Ley Reguladora de las Haciendas Locales. It would normally not exceed the fifty percent of the market value.
The calculation of the IBI tax will be done always respecting the minimum and maximum rates observed in the above mentioned law and applied to the Rateable or Cadastral value. The applicable tax rate varies from Town Hall to Town Hall always respecting the mentioned limits law stablishes. It is paid once a year, normally between September and October but it can vary depending of the area of the country in which you own the property.
- IRNR (IMPUESTO SOBRE RENTA DE NO RESIDENTES) or Non Resident’s Income Tax.
Even if you are a non-resident in Spain from the Fiscal point of view you are liable to this tax.
Just for the fact of being an owner of a property in Spain you pay a notional tax based on the theoretical enjoyment of the property; this happens independently of the fact of renting it or not.
At the moment the tax rate is 24.75% on 1.1% of the cadastral value of the property (if the cadastral value was re-evaluated after 1 January 1994; otherwise: 24.75% of 2% of the cadastral value).
The tax payer is responsible of submitting the corresponding tax declarations each year between the 01st of January and the 31st of December and it is paid on arrears.
Visona Lawyers, S.L. as your appointed Fiscal Representative will make sure that your taxes are paid correctly on due time.
A fiscal representative guarantees the Spanish tax authorities that there is a reliable, permanent contact residing in the country to represent the non-resident taxpayer.
Representing you before the Fiscal Authorities will guarantee that all notifications arising from the Spanish Tax Agency will be received as a non-resident in Spain would have difficulties to collect formal official notifications in plenty of periods along the year.
In respect of the Local Rates (IBI) Visona Lawyers, S.L. will make sure that the corresponding bills issued for the first time in your name are correctly paid and directly debited into the Spanish Bank account, notifying any possible problems that may arise in the payment procedure once informed by the Local Tax Authorities.
In respect of the IRNR Visona Lawyers, S.L. will prepare the corresponding Tax declarations. There will be as many declarations as owners of a property. In case of more than one property the tax declarations relate to the individual property and person. So one owner of two properties: two Tax declarations. Or two owners of two properties: four tax declarations.
Visona Lawyers, S.L. will inform always of the exact moment where the taxes will be charged into your Spanish Bank Account keeping you informed of any possible amendment of the standard followed procedures.
You will have always available your scanned documentation related to your files.
Visona Lawyers, S.L. will assess, when necessary (as said above a Fiscal Resident in Spain should be the person living more than 183 days per year in Spain), about the need of becoming a Fiscal Resident in Spain.
Those are normally complex reports that imply personal assessment duly prepared and require from individual study based on previously requested documentation.
