Non Resident Tax in Spain
In Spain you have to be classed as either a resident, or a non-resident. While this may sound harsh, given that you may be from the European Union, however, it is important to know how many people are in Spain are living here on a more permanent bases, and those who just have a property in Spain but reside somewhere else. A resident is of course a person who has decided to reside in Spain for long periods of time, and is usually paying all their taxes in Spain. A non-resident, usually lives somewhere else, but has a property or some type of investment in Spain, whether for private or commercial use. Non-residents are to declare their asset in Spain to be assessed for income tax, which is done through the tax return forms.
Certain taxes are applied to non-resident, for the ownership of assets in Spain, and therefore must submit the corresponding non-resident form for the Spanish tax return declaration to pay their income tax. The income tax will be relatively small as it is not based on the amount that you would have purchased the property for, but it will be a percentage of what the local authorities value it at. What the house is valued at is not a reflection of the housing market, or the going rate for a similar property, and therefore is usually noticeably below market value and what you paid for it.
If you own a property in Spain then you will have had to pay local standard taxessuch as the council and other local taxes covering amenities. You will also have to declare your property in the tax return, which is calculated on the property value that appears on you council tax letter. You must pay income tax just as you pay council tax, and if you don’t there will of course be charges that follow.
If you ever wanted to sell your property at a future date, then you will need to have all your taxes in order. Not having your taxes in order could prevent the sale of your house, because the amount will have of accumulated over the years. Whether you have an income from Spain, like rentals for example, or not you should be paying some taxes in Spain, and it is always a good idea to not let it build up.