This article is a very brief summary of the taxes due when you own a property in Spain as a non-resident, particularly non-resident property owner’s tax or, also known as non-resident imputed income tax.
My advice is to use a tax expert, lawyer or qualified accountant to calculate your tax, to inform you which taxes you need to pay and when they are due.
When you own a property in Spain you have to pay tax even if you’re tax resident in another country – non-resident in Spain.
Tax on Rental Income
If your property is rented, you have to pay tax in Spain on the rental income. This is paid quarterly in April, July, October and January. Depending on whether you’re resident or non-resident in the EU/EEA, you are able to off-set some expenditure against this tax.
If you’re resident outside of the EU/EEA you pay 24% tax on rental income and you can’t offset any property expenses against that. Residents in the EU/EEA pay 19% and can deduct property expenses.
If you rent your property for only part of the year, you only pay tax on that rental income. For the rest of the year, when the property was not rented, you need to pay imputed income tax.
Non-resident Imputed Income Tax
If you own a property in Spain and that property is not rented, the tax you pay is called imputed income tax.
This tax, like IBI, is also based on the rateable value of your property. There are different ways it can be calculated depending on when the rateable value of your property was assessed by the government.
The tax is based on either 1.1% or 2% of the valor catastral (rateable value). Most rateable values were calculated many years ago, in that case the figure used to calculate the taxable value is 2% of the rateable value. If the rateable value was reassessed in the 1990s the figure used to calculate the tax is 1.1%.
Then another tax rate is applied, as above on rental income, which depends on where you are resident and that’s either 19% or 24%. EU/EEA residents qualify for the lower rate.
IBI (Council Tax)
All property owners have to pay IBI, which is a property tax based on the value of the property and equivalent to council tax in the UK.
IBI (Impuesto Sobre Bienes Inmuebles) is based on the valor catastral (or rateable value) of the property rather than the sale value, which is usually lower than the market or purchase price. You have to pay this tax whether you are resident or non-resident in Spain. IBI is paid annually.
There is also a small tax for rubbish collection which all property owners must pay.