If you're a non-resident, there are Spanish property taxes that apply to you. It's advisable to consult a financial advisor who is familiar with both the Spanish and British taxation systems. You should note that the Spanish tax year runs alongside the calendar year, unlike in the UK.
The following information provides a basic guide to the various taxes that you need to be aware of. Also see our advice page on the financial implications of owning a holiday home in Spain.
Income tax for non-residents who rent their out their property in Spain
In Spanish this is called the Impuesto de la renta de no residentes declaración ordinaria (IRNR).
You are taxed on the gross rental income (no deductions) at a rate of 24 per cent.
Municipal property tax
This is called the Impuesto sobre Bienes Inmuebles (IBI)
This is an annual tax and varies depending upon specific property and region.
It is based on the cadastral value of your property. This is the rateable value as determined by the municipal government and is usually lower than the market value.
Capital gains tax (CGT)
If you sell your holiday home in Spain you will have to pay tax on the difference between the purchase and sale values of the property.
Capital gains for non-residents is taxed at 18 per cent.
There is a 3 per cent withholding tax at the time of sale to cover any tax liabilities.
When calculating your purchase price for CGT purposes you need to update the value using figures created by the Spanish government. You also add any expenses incurred and taxes paid as a result of the purchase.
To calculate the price of sale, you deduct any expenses and taxes incurred as a result of selling the property.
Wealth tax
This tax was eliminated as of January 1 2008.
Called Impuesto sobre el Patrimonio (Patrimonio) in Spanish.
