As 2024 draws to a close, it’s crucial for non-resident property owners in Spain to understand and meet their tax obligations. If you own a holiday or second home in Spain and use it for personal use or rent it out, it’s crucial to file your Modelo 210 tax returns correctly and on time, to stay compliant with the Spanish tax authorities and avoid unnecessary penalties.
This comprehensive guide will outline the key tax obligations for non-resident property owners, highlight the approaching deadlines, and explain how IberianTax can simplify the entire process.
Tax Obligations for Non-Resident Property Owners
If you’re a non-resident owning property in Spain, it’s essential to know the various taxes you are liable to pay. Spain has a range of property-related taxes that apply to non-residents, and understanding each one will help ensure that you’re in the know and staying compliant.
Imputed Income Tax
This tax applies to non-residents who own property in Spain and use it for personal enjoyment or leave it vacant. The Spanish tax authorities view this as potential income, even if you’re not generating rental revenue. It is calculated annually and is based on the property’s cadastral value (a value assigned by the local government for tax purposes).
Rental Income Tax
If you’re renting out your property, whether short-term or long-term, you must declare this rental income to the Spanish tax authorities. The tax rate for non-EU residents is 24%, while EU residents benefit from a reduced rate of 19%. Previously, this tax was filed quarterly, however, recent changes now allow it to be filed annually, streamlining the process for property owners.
Capital Gains Tax on Property Sales
When you sell property in Spain, you are subject to Capital Gains Tax (CGT). Non-resident property owners must declare any profit from the sale by submitting a Modelo 210 within four months of the sale date. The tax is based on the difference between the property’s sale price and its acquisition price, after accounting for expenses and improvements.
Additionally, when you sell property in Spain, 3% of the sale price is withheld by the buyer and paid to the Spanish tax authorities as a guarantee against the capital gains tax liability. If the actual tax liability is less than 3%, or if you sold the property at a loss, you can reclaim the difference by submitting a claim to the Spanish tax authorities.
Local Taxes
In addition to national taxes like the Imputed Income Tax and Rental Income Tax, property owners in Spain are also subject to local taxes, such as the IBI (Impuesto sobre Bienes Inmuebles or Property Tax). This is a council tax based on the cadastral value and is used to fund local municipal services. Additionally, there’s the Basura (waste collection tax), which covers the cost of local waste management services. These local taxes vary depending on the location of your property.
Upcoming Tax Deadlines You Need to Know
As we approach the end of the year, there are some important tax deadlines you need to be aware of:
2023 Imputed Income Tax Deadline: 31st December 2024
Non-residents who own property for personal use or leave it vacant must file the annual Imputed Income Tax return by the 31st December for the previous year. Even if you don’t generate rental income, this tax is mandatory, and failing to file on time could result in hefty fines.
The 2023 Imputed Tax return can be filed now – simply register for your free account at iberiantax.com – Fill out their simple questionnaire and they’ll calculate and submit your taxes for you. Then you simply choose how to pay & you’re done!
2024 Rental Income Tax Deadline: 1st – 20th January 2025
If you’ve rented out your property in 2024 (partially or fully), the Rental Income Tax must be declared between 1st January and 20th January 2025. This applies to rental income earned throughout 2024 for both short-term holiday rentals and long-term lets, and thanks to recent legislative changes, it is now filed annually instead of quarterly, making it more straightforward but no less crucial to stay on top of.
If you need to file a 2024 Rental Income tax return, you can access and pre-fill your Rental Income form now, so it’s ready to submit in January! Simply register for your free account at iberiantax.com and follow the simple instructions. They will then remind you when its time to complete the process and file.
Why Choose IberianTax?
Getting to grips with Spain’s tax system as a non-resident can be challenging, especially if you’re unfamiliar with the regulations and tax forms, but that’s where IberianTax comes in. With years of experience and a focus on simplifying non-resident tax filing, IberianTax provides a hassle-free solution that has been designed specifically for property owners in Spain.
Free Registration and Access to Tools
By signing up for free with IberianTax, you gain access to a range of useful tools and resources. Use the tax calculator to estimate your liabilities, consult the help desk for any questions you have, and receive guidance from tax experts on complex matters.
Fast, Easy, and Affordable
Our platform allows you to file your taxes quickly and efficiently. The intuitive interface means you can navigate the entire process in just a few clicks, making tax filing stress-free. Our prices start as low as €34.95, making it an affordable alternative to potentially expensive accountants or tax advisors. We’ve managed to save our customers hundreds of euros on their non-resident tax returns!
User-Friendly Platform
Available in English, German, and French, IberianTax’s platform eliminates language barriers and simplifies that ever-confusing tax jargon. This ensures that even if you’ve never filed a tax return before, you can do it without confusion or complications.
Security and Privacy
All personal data is securely encrypted, ensuring the privacy and protection of your financial information throughout the filing process. IberianTax is also fully certified and approved by the Spanish tax authorities (Agencia Tributaria), giving you peace of mind that your tax filings are accurate and compliant.
Customer Satisfaction
Don’t just take our word for it—our customers are our biggest advocates! IberianTax boasts more than 400 positive reviews on Google, many of whom have previously only used accountants, or are filing for the very first time. It really is proof that filing with IberianTax couldn’t be easier! Check out our reviews for yourself here.
Register for Free and Get Started Today!
Getting started with IberianTax is as easy as 1-2-3! Simply visit iberiantax.com and create your free account. Once registered, you can use our tax calculator, access the help desk, and get started on your tax filing process. Our step-by-step guidance ensures that your returns are submitted accurately and on time, leaving no room for errors.
Don’t Wait Until It’s Too Late!
With the deadlines for Imputed Income Tax and Rental Income Tax fast approaching, now is the perfect time to set up your free account and get ahead of the game. Filing your taxes early with IberianTax means you can avoid last-minute stress and enjoy the end-of-year festivities worry-free!
