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Spanish income tax return for non-residents

Updated: May 18, 2021

Income tax return for non-residents regarding real estate transactions

There is no doubt that Spain is one of the most attractive tourist destinations to travel (75 million visitors in 2016, a historical record) and that many of the people who come decide to stay, or they decide to buy real estate here, even though they are still residents in their own country, in order to enjoy the cultural, gastronomic and social wonders that Spain has to offer to those who want to spend a few days.

It is convenient to know that since the moment you decide to be the owner of a real estate in Spain, even if you do not live in Spain, you have certain Spanish tax obligations regarding your tax return, of which people are usually unaware.

You also have to be careful, since in most cases the deadline for these taxes is not the same as the one for the income tax return for residents in Spain. This can create confusion and “unpleasant” situations with the Spanish Tax Agency, such as delays for which you have to pay surcharges.

When a non-resident owns real estate, two different situations are possible:

– The non-resident person rents the purchased property, which produces a recurrent income.

In this case, this rent income has to be declared on a three-monthly basis and an income tax return for non-residents has to be filed in the corresponding terms.

– The non-resident person does not rent the real estate, since it is used for personal use (holidays, bank holidays, etc.).

In this case, as it is not a usual residence, just the same as in the income tax return, you have to add a % of the assessed value and file the corresponding income tax return for non-residents on a yearly basis.

As you can see, regarding the Spanish Tax Agency, the fact of being a non-resident does not exempt you from certain tax obligations if you own a property in Spain.

If these obligations are not met, the person could be subject to audits by the Tax Agency, which could lead to sanctions and fines.

Income Tax for non resident selling a property in Spain

Regarding real estate owned by non-residents, another possibility is that it is sold.

This sale, just as when the transaction is between residents, will yield income or loss (depending on the purchase price and the selling price).

The Tax Agency also requires you to declare that income coming from the sale and to pay taxes on it in case of profit. To pay this income tax for non-residents you have three months after a month from the date of sale of the property. As you can imagine, not doing so can lead to audits and/or sanctions by the Spanish Tax Agency.

Depending on the double taxation agreements signed by Spain and the corresponding country, these amounts paid as income tax for non-residents could later be deducted, to a greater or a lesser extent, in the income tax return in the country of residence based on the corresponding tax criteria.

In conclusion, ignorance of the law is no excuse for not obeying it, but it is better to know it and avoid unnecessary trouble.

We can be helpful if you have any hesitation about Spanish income tax statement for non-residents.

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