Any homeowners of an urban building in Spain, whether they use the property themselves or not, are liable to pay the Non-Resident Income tax, even if they are left unoccupied.
The payment is compulsory.
Although you may not receive any real income or rent from the property, the law presumes an income.
The Non-Resident tax is paid in arrears on a yearly basis.
This tax is prorated for the days you were owner of the property during the accrued year.
Your share in the ownership is also taken into account to calculate the Non-Resident tax.
Many Non-Residents are asking how the Spanish Tax Office is calculating the tax due if there is in fact no real income.
In general terms, the law presumes an income of 1, 1% or 2% of the Catastral value (you will find this on your rates Bill). The rate used will depends of the revisions made by the Town Hall.
Please, note that the catastral value may change every year depending on the decision of the Town Hall where the property is located or what it is stated in the National Budget Law.
You are then taxed at 19% of the resulting figure if you are residents in EU, Iceland and Norway and at 24% for the rest of the countries.
Taking into account all these facts, your solicitor will be able to determine which the accurate values which must be applied are.
The form called 210 is the form to be submitted for Non-residents income tax.
The term for payment goes from the 1st January to the 31st of December every year and the tax paid corresponds to the previous calendar year.
Income tax is operated on a self-assessment system. Payment must be made direct to the Tax Office.
There is no possibility of setting up a direct debit for the payment of this tax.
It is the owner’s obligation, through his solicitor, to fill in the tax return and take it to the Spanish Treasury.