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Annual Taxes
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The main annual taxes that affect people with property in Spain are as
follows:
· Wealth Tax;
· Property Taxes; and
· Income Tax
The official value of your property in Spain for any tax purposes is
called VALOR CATASTRAL. It figures in the receipt for your local rates and
can be revised or adjusted every year.
WEALTH TAX - If you are non-resident in Spain, then you must pay Wealth
Tax (the patrimonio) on all your assets situated in Spain. Assets include
your house, bank accounts and other assets with a determined value (e.g.
stock and shares).
PROPERTY TAX - Spain has a rates system called IMPUESTO MUNICIPAL SOBRE
BIENES INMUEBLES. Every owner has to pay property taxes and it is up to
you to check your liability for payment with the local Town Hall.
Unfortunately the Town Hall may not write and tell you. You may also be
billed separately for the Refuse collection. The amount of tax you have to
pay is based on your rateable value, the Valor Catastral (i.e. the same
value that you have to show on your Wealth Tax return). In addition to the
basic rates, you may also find that your local Town Hall will introduce
local taxes and charges (TASAS) from time to time to pay for local
developments and services.
INCOME TAX - You are liable to income tax (renta). If you are non-resident
in Spain you are taxed on any income arising from a source within Spain,
such as your income from letting your property (and this includes any
income paid to you in the UK or elsewhere as well). There is also a rather
unusual part of Spanish Law that requires everybody to include a
percentage of the rateable value of their property as a notional rental
income paid by themselves to themselves. If you are non-resident, you will
be liable to tax at a minimum rate, regardless of whether you are letting
your property of not.
This all appears complicated and confusing, but in reality it is not. Our
agents can advise on a good local, English speaking Gestoria (accountants)
who can advise you and complete all the necessary forms.
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