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Taxation in Spain

If you have a property or live permanently in Spain, make sure you fulfill with your tax liabilities and duties.

You are in good and faith hands with us.

Taxes in a different country could be a hard, complex, expensive and time-consuming matter, and it will probably cost you more than you imagine if you are not a specialist on this area. The give you a quick picture of the Spanish taxation system that may me applicable to both a resident as well as a non-resident citizen so that anybody can understand how important is to take a proper advice on time.

Resident taxation in Spain

The tax liabilities when someone becomes resident in Spain are mainly two:

  • To present the resident tax returns (form 100) and/or wealth tax (form 714).  To do that, it is necessary to declare all your worldwide rent and wealth (not only those obtained in Spain): incomes from job/pensions/rentals; interests, dividends or bonds paid; investments and shares…; properties (rented or not rented); sales done (properties, investments, shares in companies…).
  • To analyze whether it is necessary to present an informative tax declaration (form 720) in which any resident person has to declare abroad assets above a value of 50.000€. It is not a declaration to pay taxes, but it helps as control to the tax authorities of the future tax returns and/or wealth tax declarations presented.

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Non-Resident taxation in Spain

Congratulations! You have bought a property in Spain and will enjoy it many years, but there is a question you do yourself now: what are my tax obligations and formalities to avoid any problem with the tax authorities? Let us explain briefly what the different tax liabilities to take into consideration.

Non-resident tax is a personal tax and it is an obligation to all owners who are holders of a property in Spain. The non-resident tax declaration is presented in different periods and ways, depending on the following situations:

Properties without rentals

The tax declaration is presented once a year, from the 1st of January to the 31st December of the following year (i.e. 2022 period has to be presented during 2023). The tax is a fix rate, which depends on the tax value of the property (different from the price paid to the seller on completion at the notary –purchase value-). The tax value is shown on Catastro Registry and within the yearly council tax receipt released by the Town Hall where the property is situated.

Properties with rentals

The tax declaration is presented every quarter of the year the property is rented (rentals with a profit) and/or once a year (rentals with a loss). Depending on the result of the rental period every quarter, the obligation can be for one up to five tax declarations per year. The tax is variable, which depends on the profit obtained on the rentals (incomes less expenses of each quarter of the year). Only UE citizen can opt for the deduction of expenses directly or indirectly linked to the rental or the property.

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Property Taxes in Spain

Council Tax

Known as IBI, is the tax the property pays every year an annual tax to the Town Hall where the property is situated. Its amount depends on the tax value of the property (not the price paid at the notary to buy it).

Stamp duty Tax

It is the tax all buyers or a property will pay after signing at the notary. The rate is from 6% to 10% depending on the region the property is place. In general terms, the deadline to pay it is 30 days after completion.

Plusvalía Tax

When you sale a property, this tax could be applicable depending on the result of the sale (profit or loss). It depends on the number of years a person has own the property before selling it. Nowadays there are some different points of view in respect to the obligation to pay it even when you obtain a loss, so do not lose your opportunity to claim for your rights.

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Other Taxes in Spain

Car Tax

The tax you pay for your vehicles with Spanish plate registered in the town hall where you have your property or residence. It is usually paid once a year and is managed directly by the town hall.

Inheritance Tax

The tax all inheritors pay to receive any asset in Spain inherited by the deceased person. The deadline is 6 months since the deceased date and it can apply for some reductions and bonificados depending on the relationship between the inheritor and the deceased person.

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