Non-Residents Income Tax in Spain
This information has been prepared by Sykes Anderson Perry Limited as a general guide only and does not constitute advice on any specific matter. We strongly recommend that you seek professional advice before taking action. No liability can be accepted by us for any action taken or not taken as a result of any information or advice given or omitted
The Spanish tax authorities consider that an individual who spends less than 183 days a year in Spain is a non- resident for tax. By the mere fact of owning property in Spain one is liable for the filling and payment of Income Tax for Non-Residents.
When a non-resident owns property in Spain and receives rental income from it they must file this tax quarterly. The rate of tax is paid on the rental income and varies from 19% for EU and EEA nationals to 24% for non-EU nationals. EU and EEA nationals are able to deduct expenses such as interest paid on the mortgage, maintenance costs.
This tax is also payable by those who own property and do not rent it out. The tax is paid based on a percentage applied to the cadastral value of the property. The tax rate is also 19% for EU and EEA nationals and 24% for non-EU/EEA nationals.
It is often the case that property owners do not realize that they have to pay this tax on the grounds that they are not receiving any income from the property, however, failing to pay this tax may trigger potential issues when disposing of the property. The Spanish tax authorities are developing more aggressive policies in order to recover revenue, therefore Spanish property owners should pay careful attention to Spanish tax matters.
Álvaro Aznar Azcárate
Solicitor and Spanish Abogado