Tax representation for residents and non-residents in Spain

In this section we are pleased to write some lines about different topics related to fiscal liabilities for both Taxs residents and non-residents in Spain.

Non Residents Wealth Tax in Spain

Welex, your leading law firm in Marbella has the pleasure to write some lines about the Wealth Tax in Spain.

The Wealth Tax in Spain (also called capital, equity or fortune tax) is a Tax that is applied individually, not on annual income or transactions, but on the personal assets of each individual which include among others: bank deposits, real estate and pension plans, and the calculation is based on the total value of these assets of the taxpayer.  In the case of non residents the calculation will include all the assets held in Spain.

On 2008 the Spanish Wealth Tax was eliminated by the introduction of a 100% bonus with the Law 4/2008 published on December the 23rd. But this did not last long as on 2011 due to the economical crisis the tax was re-established temporarily and since then it has been renewed on an annual base including the one which corresponds to the period 2018 which was approved and published by the Official Gazette on 4/7/18 by the Law 6/2018 of July 3rd.

As a general rules of the Wealth tax in Spain:

  • At the time of the Tax calculation you must take into account not only the Assets and Rights but also the related debts and obligations.
  • To calculate the property value, the tax payer must include the higher value between the Fiscal, Rateable and Acquisition value.
  • The first 700.000 € are exempt of taxation.

Non Resident’s Income Tax in Spain

By WeLex, your leading law firm in Spain!

Being a non resident and owning a property in the Spanish territory you will be subject to the Non Resident Income Tax.

When the property is owned by more that one person regardless if are married on not, each owner will be treated as an independent taxpayer and therefore each owner should file its own personal tax form.

Non Residents Income Tax in Spain– property for the owner’s personal use

The annual income will be calculated applying the percentage in forced to the rateable value of the property published by the local authorities on the local property tax (IBI).  In general, this is 2% or the reduced percentage of 1,1% if the rateable value has been reviewed in the last previous ten years.

The income is accrued at the end of the tax period , 31 of December and required to be submitted during the following 12 months.

Non Residents in Spain

Are you a property owner in Spain? Or, planning to purchase a second home and you are Fiscal Resident in another country, then you must be aware of the yearly Spanish tax liabilities which you will be subject to after the purchase.

1 – Non Resident’s Income Tax in Spain.

Property for own use – This is when the property in Spain is available to its owners during the full year.

Income from leased properties – This should be applied when the property is rented out to a third party.

Leased only for periods of the year and the other periods available to its owners.  The tax obligations will be a combination of both previous cases and therefore required to present both sets of tax returns.

2 – Local Property Tax (IBI).  This is a tax on the property (urban or rural) all property owners are subject to this tax regardless their country of residence.

3 – Wealth Tax in Spain was re-established exceptionally from 2011 onwards and has been prorogued by the government on annual bases up to and including 2018.

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