Every year owners of real estate assets that are non-residents in Spain are obliged to pay non-resident tax to the Agencia tributaria, the Spanish tax office. This fiscal obligation is not to be confused with the IBI (impuesto sobre bienes inmuebles, more on this later).
Non-resident tax has to be paid before the end of the year and it is always related to the previous fiscal year.
Fiscal representation and identification number
Non-residents, will have to appoint a fiscal representative in Spain. In general this will be your lawyer, or an accountant. Fiscal communications will be sent to the fiscal representative address or to the property address if there is no fiscal representation. It’s always a good idea to appoint a representative, as tax office correspondence will have to be answered promptly (within 10 days normally). This should be notified to the tax office administration corresponding to the property location. In order to pay taxes in Spain a fiscal identification number is mandatory, (NIE). This ID number is obtained by registering the NIE, your fiscal representative will take care of this matter and inform the tax office about it.
When the property is belonging to several persons, each one is considered an independent taxpayer and must file an individual tax declaration. The taxation is different when the property is assigned for personal use or if the property is rented:
Property assigned for personal use
In this case the amount to declare is a percentage of the cadastral value. This can either be 2% or 1.1% depending on the situation. If the property has not been owned during the whole year or it has been rented this quantity will be decreased to the pro rata of the period of ownership. The non-resident tax to be paid is equivalent to the 24% of the declared value for year 2011 (that has to be paid before the end of 2012). Non-resident tax in 2012 and 2013 (that will have to be paid in 2013 and 2014 respectively) will be 24.75% of the declared value. Your fiscal representative will calculate these values for you.
Income from rented properties will have to be declared in full. Nevertheless taxpayers that are resident in the EU will have the possibility to deduct certain expenses directly related to the property. The tax payable to the declared value is 24% for fiscal year 2011 and 24.75% for fiscal years 2012 and 2013. The deadline for paying taxes depends on the types of income of the taxpayer and if it is the only income in Spain. Again your fiscal representative will calculate these values for you.
IBI Impuesto sobre Bienes Inmuebles
IBI is an acronym for Impuesto sobre Bienes Inmuebles, (equivalent to the Property Tax). It is a local tax that property owners are paying to the local council administration regardless if they are resident or non resident in Spain.
Depending on the town hall, the IBI payment bill will arrive once or several times a year, most of the time twice a year. The payment of the IBI can be organized by direct debt on the property owner’s Spanish bank account.