Skip to main content

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.

Resident Tax

For tax purposes you are Resident in Spain when anyone of the following circumstances applies:

  • You spend in the country more 183 days a year. In order to determine the permanence in Spanish territory, the Tax Office has stated that the occasional absences are included, except if the taxpayer proves their residency in another country. In the case of countries or territories labelled as tax havens, the Taxa Office can demand proof of stay in that tax haven over a period of 183 days within the calendar year.
  •  Your family is also living in Spain; if you have dependent not legally separated spouse and/or underage children who are usually resident in the country. This situation accepts evidence to the contrary.
  • You have situated the main base or centre of your activities or economic activities, directly or indirectly, in Spain.

In those cases, you are obliged to submit in Spain your personal tax return including all the income from all over the world (regardless of the place where it is generated or paid).

A wrong idea is often spread out among expat residents: “my pension is already taxes at home so I don’t need to serve any tax return in Spain”
Nothing further from truth!

This matter is regulated in depth by DOUBLE TAXATION AGREEMENTS signed between Spain and different countries.
These agreements clearly establish that income tax must only be paid in the state of residence.

Who is obliged to make a tax return? All individuals resident in Spain are obliged to file an income tax return, except those who have received income only from (with some nuances):

  • Income from personal work equal to or less than €22,000 per year (if it comes from a single payer).
  • Investment income and capital gains subject to withholding or payment on account, with a joint limit of €1600 per year.
  • Real estate income attributed from treasury bills and subsidies for the acquisition of subsidised housing with a joint limit of €1,000 per year.

720 Form

Since 2012, all persons resident in Spain who own real estate, bank accounts or investments located abroad when their value exceeds €50,000 are obliged to file an informative tax return known as form 720.
The filling period of the form 720 going from the 1st January to the 31st of March of every year.

Is there an obligation to submit it when the ownership of a bank account, interests or building located abroad whose value at the end of the year exceeds 50000€ is shared, and whose ownership corresponds to several people? Yes. There is an obligation to declare when this limit is exceeded regardless of the number of holders. The total value should be declared, indicating the percentage of participation.

Once the Form 720 has been filed in relation to one or more of the reporting obligations set out therein, it will only have to be filed again when, in relation to one or more of these obligations, there is an increase in the overall limit established for each block of information of more than €20,000 with respect to what was determined in the last return.

In the event that the Form 720 is not filed and there is an obligation to file for all three reporting obligations (properties, accounts or investments), then the minimum penalty for non-filing would be 30,000€.

In case there is only an obligation to file it for only one of the reporting obligations (for example, if only one account is held abroad in excess of € 50,000 and is not reported), then the minimum penalty that could be imposed for non-filing is € 10,000.

100 Form

The tax return form to submit the personal income tax is called 100 Form.
In Spain, the fiscal year is the same as the calendar year and tax is paid in arrears.

The income tax return campaign is from May to June and unlike in other countries, you must complete and serve your own tax returns.

It is very important you ask your solicitor to check if you are obliged to serve your income tax return or if your income is too low, in which case you might well be exempt.

As Resident in Spain, you are obliged to declare all earnings, this includes:

  • Pensions from your home country, with one exception: if the pension received is from local or central Government (Armed Services, Police, Firemen, Teachers…) it can only be taxed in the country of origin. A deduction for double taxation is applicable to all earnings which are taxed abroad so you are not going top ay twice on the same income.
  • Dividends; If the dividends come from another country with which there is not an Agreement for the Avoidance of Double Taxation and are also taxed in the other country, the taxpayer may apply the international double tax credit provided for in Article 80 of Las 35/2006 of 28th November.
  • Interest arising from bank deposits.
Go to Rental tax (tax on rental income)