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Non Resident Tax

There is a direct connection between the Non-Resident Tax and owning a property in Spain, but the fiscal consequences could be very different.

Non-Resident tax for private use of your property; Non-Resident Taxes on the rental income on your property. There is also Capital Gains Tax when you sell your property.

In Spain, tax issues are very important. The Tax Laws in Spain are frequently changed and therefore it is essential that you have a Qualified Tax Adviser to help you.

When you buy a house in a foreign country it is vital that you receive Specialist Tax Advice that can answer all your questions, such as:

  • Why do I have to file a NonResident Tax Return?
  • When must this Tax-Return be filed?
  • What amount of Tax is due?
  • Are there any expenses which can be deducted?

At the moment there is an enormous amount of turmoil concerning the Non-Resident rules. Many people do not fully comprehend the importance and necessity of filing the Tax Return.

1Having a property in Spain involves paying taxes. Some Taxpayers are confusing the IBI (Property Tax) with the Non-Resident Tax. These taxes are entirely different and both must be paid if you are a Non-Fiscal resident.

Some of the scenarios that require Non Residents to complete a Tax Return

NON-RESIDENT Tax  for homeowners (even for private use).

Anyone who owns an urban property or a house in a plot in the country side for personal use, is liable to pay the Non Resident Tax Return. The Form 210 must be completed annually and filed by 31st December.

RENTAL INCOME. Non-Residents who rent out their houses are liable to pay taxes on the Income received. In general terms you have to pay taxes on the gross income.

However, from January 2010, if you are a member of an EU State, Iceland or Norway, deductions of expenses can be made from gross rental income.

CAPITAL GAINS TAXES on property sale. These taxes are due on the profit made when selling your asset. The buyers withhold 3% of the purchase price. This amount is retained by the Spanish Tax Authority in the name of the seller as a payment in advance of Non-Resident Taxes. If the Capital Gains Tax is lower than the amount held by the Spanish Tax Authority (3%) this will be refunded to you. Should the amount due be higher the difference must be paid.

Tax reliefs may be applicable on properties purchased before 31.12.1994, which could possibly reduce the tax burden.

Tax Form and period for filing.

The seller must submit the Spanish Tax Return (Form 210) within 3 months after the sale.

LEGAL AND TAX HELP will provide you with the following services

  • Calculation and submission of the Non-Resident taxes.
  • Keep you informed of all Non-Resident changes.
  • Ensuring all Non-Residents taxes are paid on time.
  • All enquiries regarding Non-Resident Status and your property