What taxes I must pay if I don’t live in my home in Spain
17 May, 2023 | M Aparicio
The house is subject to a lot of regulations and laws that indicate the taxes the holders must pay. In this educational article by HipotecasPlus, we want to offer you all the information we have on the taxes to pay if you do not live in your home in Spain.
First of all, if you own a property in Spain but don’t live in it, you should know that you must pay some taxes in Spain. This applies whether you are a Spanish resident living abroad or if you are a non-resident foreigner in Spain.
Furthermore, it doesn’t matter if your house is rented or you only want to enjoy it for yourself: you will always have to pay the Non-Resident Income Tax (IRNR) in Spain.
So, in this article, we are going to explain 2 basic things:
- When you must pay the IRNR
- What additional taxes you must consider
Anyways, you are going to have to take into account the “Hacienda (Treasury) 210 model”, because we are going to refer to it several times. You may also need the 211 model. Both are taxes fixed by Spanish authorities that are compulsory.
The thing with taxes and especially taxes to pay if you do not live in your home in Spain is complicated, but as we always do at HipotecasPlus, we are going to explain it to you in the most entertaining and educational way.
When do you have to pay the Non-Resident Income Tax (IRNR)?
If a non-resident owner has a home for personal use
Even if you do not obtain any income from the empty house, you must declare the imputation of real estate income.
To calculate the taxable base of the tax, it is necessary to know the cadastral value of the home and apply a 2% of its value (or a 1.1% if the value is properly updated).
The tax rate will be applied to this result, which is 19% for residents of the European Union and the European Economic Area, and 24% for the rest of the countries.
In that sense, it is important to keep in mind that residents of the United Kingdom will have to pay the tax rate of 24% from 2020, due to the well-known Brexit. That withdrawal agreement between the European Union and the United Kingdom keeps appearing in the media, and keeps being a social problem with evident economic repercussions.
You must declare this tax annually during the entire calendar year following the year of accrual, using model 210 of Non-Resident Income Tax.
If a non-resident owner has a home rented to a private individual
The return that you will have to declare if you have your home rented is the full income that you receive as a landlord.
In that sense, residents of the European Union or the European Economic Area (EEA) can deduct expenses such as the following:
- Real Estate Tax (IBI)
- Community expenses
- Amortizations and interest of the loan for the purchase of the property, etc.
However, residents from other countries will not be able to deduct any type of expense. That’s the reason why it is very important that you know the types of tax you must pay, according to your personal circumstances:
We reiterate: the tax rate will be 19% for residents of the European Union and the European Economic Area, and 24% for the rest of the countries.
And, remember, you must declare this tax quarterly, using the Non-Resident Income Tax model 210, the one we have previously talked about.
If a non-resident owner sells the property
If you decide to sell your property, you must pay non-resident income tax (form 210) for the non-resident income tax (form 210) at a tax rate of 19% over a period of three months on the capital gain obtained from the sale.
What’s more, in order to guarantee the tax obligations of the non-resident seller, the buyer has to make a withholding of 3% of the price at the time of signing the deed, and pay it to the Treasury within a period of one month from the signing.
This provisional withholding is considered a payment on account of the Non-Resident Income Tax that corresponds to the seller.
So, once the 3% withholding has been made, the buyer must fill in the model 211, which is the informative declaration on the Non-Resident Income Tax, and present it to the Government Tax Agency within a period of one month from the signing. Of course, you can present it online, in case that you have an electronic certificate.
Besides, the non-resident seller can request the return of the excess withholding if it exceeds the amount of the tax that Spain should pay for the sale of the property. To do this, you must submit the corresponding Non-Resident Income Tax return and request a refund within four years after the tax accrual.
Important: You have to keep in mind that, in case the buyer does not make the 3% withholding or does not present the 211 model on time, economic sanctions may be imposed by the Government Tax Agency.
Therefore, make sure you properly follow these tax obligations, in order to avoid problems in the future.
Summary and final conclusions on taxes you must pay if you do not live in your house in Spain
If you own a home in Spain and live outside the country, you will have to pay taxes in Spain.
If the property is for your personal use and you don’t earn income from it, you must declare the imputation of real estate income and pay the Non-Resident Income Tax.
But, if the house is rented, you will have to declare the full income you obtain and you will be able to deduct some expenses, depending on your country of residence.
Moreover, if you sell the property, you will have to pay taxes on the capital gain obtained, and the buyer will have to withhold 3% of the price at the time of signing the deed.
Anyways, remember that, if you need help to comply with your tax obligations in Spain, from HipotecasPlus we advise you to go to a tax advisor in order to be properly advised.
And, if you are interested in the subject of housing taxes, we also recommend to read these two articles written by our team: