Friday, December 11, 2009

Non residents tax warning

The tax authority is now closing in on non resident property owners who are not presenting there annual tax returns and payments, the tax authority has linked with the land registry system and knows who owns every property, resident and non resident in Spain, every property owned by a non resident is taxable as income even if you don’t rent it out,The tax declaration and payment for 2008 has a deadline of December 2009, late declaration and payment incur a fine, ignorance of the law is not accepted as a reason for non payment, Property and bank accounts can be embargoed until back taxes are payed in full.
It is important to realize this is an income tax on your property, and is separate from and and in addition to the local tax IBI/SUMA which is an annual payment on the actual bricks and mortar, It does not relate to income in terms of your wages and pensions,but only to property ownership.


Villas for sale in Spain said...

Usually the unpaid tax gets taken care of at the Notary at the time of completion and any fines are small. The tax itself is meant to represent a tax on a deemed but undeclared rental income and is based on the catastral value and is about 2.24% of this.

I am not suprised that the tax authorities are taking their jobs a bit more seriously these days!

Advoco said...

The non resident tax for someone who owns a property but doesn't rent it out is 24% of the "imputed rent" you are assumed to have earned which is calculated as 1.1% (or 2% for some older properties) of the catastral value on your IBI receipt for the year in question. If you hire someone to do it for you their fee should be no more than 30-50€.