I highlight the tax obligations for non-resident property owners in Spain so you can be ready to fill in your tax return correctly and on time.

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Do you own property in Spain but live somewhere else?
What Spanish taxes do you need to pay?
And when do you need to submit your tax returns?
Stick around and you’ll find out.

Let’s dive straight in. 

First of all, I’m not an accountant, but that’s okay, I’m not here to do your taxes. But I can tell you what you need to know before you either file your own tax returns or pass them to an accountant. 

So here are the taxes you need to know about:

Income Tax

There are two kinds. Rental Income Tax and Imputed Income Tax.

Rental Income Tax is for non-residents who own a property that’s rented out, either short or long term. This income must be declared to the Spanish tax authorities.

Imputed Income Tax is for non-residents who own a property but don’t rent it out, and it’s left vacant when they and their friends aren’t there.

But why should you pay an income tax if you’re not earning an income from it?

Because the tax authorities see the property as having a potential income, even if there’s no revenue.

So how do they work out how much tax you pay?

It’s based on the property’s Cadastral value, which is the value assigned to it by the local government for tax purposes. This is calculated annually. Check with your accountant for the rate in your region.

And what are the tax rates for rental income?

The tax rates for non-EU residents is 24%. If you’re an EU resident you get a reduced rate of 19%. This used to be filed quarterly, but it’s now possible to do it annually. 

That must be a relief for property owners.

Yes, and cheaper too if they’re using an accountant each time.

Are there any more taxes to be aware of?

Yes, there’s Capital Gains Tax or CGT, and this needs to be declared within four months of selling a property. 

How is it calculated?

CGT is calculated on the difference between the buying price and the sale price of the property, after accounting for expenses and improvements.

Anything else I should know about CGT?

Yes, 3% of the sale price is withheld by the buyer and paid in tax by them as a guarantee against CGT liability. If the actual tax liability is less than 3%, or if you sold the property for a loss, you can reclaim the difference from the Spanish tax authorities. 

Are there any other property taxes?

There are no more national taxes to be declared, but the local authorities will collect a council tax or IBI, which is based on the property’s Cadatral value and is used to fund local services. There’s also a Basura or waste collection tax. 

How much do these taxes cost?

Both of them vary depending on the location of the property, but they’re usually not very much, especially compared to council taxes in the UK for example. 

What are the deadline dates for declaring?

The Imputed Income Tax deadline is the 31st of December, that’s easy to remember. It’s a mandatory tax, so make sure you don’t miss the deadline or you could be facing a big fine.

What’s the deadline for Rental Income Tax?

The deadline for that is between the 1st and 20th of January of the following year, so the tax return for income received in 2024 will need to be filed before January 20th 2025. And remember, that’s not just for holiday lets, it’s for long-term lets as well.

That all sounds very easy.

It does, but if you have any queries or problems, you should consult a qualified Gestor or accountant to help you. Spanish tax forms can be confusing, and one small mistake can end up costing you big.

Is there anyone we recommend?

Yes, ask in the comments and I’ll introduce you to someone trustworthy.

Check out some of the other really popular articles on YouTooSpain, and I’ll see you there. 

Peace & Love!

Article by Skatz