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Own a Property in Spain ? Then you need to read the following

By Malcolm Roach M.I.C.M - Tue 20th Nov 2012

Wincham International would like to advise you that you are obliged to submit a Non Resident Tax Declaration to the Hacienda (Spanish Tax Office) if you own a Spanish property as a holiday home or a Spanish property that you rent out for part of the year and visit occasionally.

This must be filed by the 31st December every year covering the previous calendar year of ownership.

You are obliged to pay tax on the value of the property annually and this is calculated by the Hacienda on the Catastral Value of the property which is detailed on the IBI Bill (Rates Bill) you receive annually.

If you are not currently submitting a Tax Return (there needs to be one Tax Return for each registered owner of the property) you may receive a demand from the Hacienda for taxes due over the previous 4 years and there will be hefty fines attached as well. If you manage to slip through the net you will most certainly be caught by the Hacienda when you come to sell the property as the new owner will be required to pay a 7-10% Transfer Tax (dependant on the region the property is located in) and it as at this point that the Hacienda will check to ensure your Tax Returns have been submitted.

You are also liable to pay Wealth Tax on any assets you own in Spain over the value of 700.000 Euro annually.

Please do not bury your head in the sand any longer - failure to comply with legislation could prove to be a costly exercise!! If you would like to speak to one of our Team regarding your situation please contact us by clicking on the banner (below...).

Comment on this Blog

Dear John, As a non Resident individual who owns & rents property in Spain then you submit a Tax Declaration by 31st December each year the rent collected during the previous calendar year in Spain. Alongside that if the rent is collected in Spain then each quarter there are IVA / VAT Returns to submit as well.
Mark Roach, Wincham Consultants Ltd - Tue, 28th Jul 2015
Dear Sir Please could you let me know what are the advantages of my transferring my spanish property into my UK limited company ? Many thanks
Mark Garner - Sun, 26th Jul 2015
i have been told i have to submit a tax return every 3 mths as a none resident... (canary islands)
John Cliff - Tue, 5th May 2015
Hello Denise, Thank you for your telephone discussions with Wincham today and allowing us to confirm your options of collecting rent from a UK Company that owns property in Spain.
Wincham Consultants Ltd - Tue, 5th May 2015
Does putting Spanish holiday property into UK limited company - also mean that the 25% quarterly withholding tax on any rental income does not have to be paid in Spain - and annual accounts can be submitted in UK instead?
Denise Guest - Fri, 10th Apr 2015

We recently bought a small apartment in marbella in april'14. We plan to stay there for 4-5 mths in the winter and it would remain unoccupied for the rest of the time.

We are not planning to let this - at least for the time being.

1. are we also supposed to file a tax return very year.

2. We were notified of IBI of 790 euros by our lawyer but have just paid 877eur by body sent a bill.

many thanks
Jag - Mon, 18th Aug 2014
Dear Keith, To help tidy up your last 4 years unpaid non Resident Tax Returns we can submit them for you for the last 4 years at ?175 per Return if you wish.
Wincham Consultants Ltd - Mon, 13th Jan 2014
I have owned a house in Mazarron, Spain for about 7 years and have never submitted a tax return or paid any taxes or even had an IBI bill, HELP! Keith Williams.
Keith Williams - Sun, 12th Jan 2014
Dear Cheryl, If you have not submitted your last 4 years non Resident Tax Declarations for owning Spanish Property then we can submit them for you but we will not know if fines and interest have to be paid until we submit them in Spain. Anyone who owns their Spanish property within a UK Company structure does not need to Submit these annual Non Resident returns nor does a UK Company pay Wealth Tax in Spain.
Mark Roach, Wincham Consultants Ltd - Tue, 29th Oct 2013
we purchased two villas in spain some 8 years ago and have not sent a tax return please advise,
Cheryl Bicker - Fri, 25th Oct 2013
Dear George, We can help and advise you on your purchase and also look to save you the 7/10% Purchase Tax, if you require any further information please visit the Wincham website using the banners / links above.
Mark Roach, Wincham Consultants Ltd - Wed, 7th Aug 2013
Hi there. I'm a UK citizen working in Qatar and have been non resident for the past 12 years. I am considering buying property in Spain with a view in the future to semi retire there. (now used to the hot weather and not going back to Blighty to live!) The housing crash in 2007 totally destroyed my pension 'pot' (property in the US!!!!) so I am now loathe to use all of the remainder of my savings into more property, therefore looking to finance a purchase in Spain if at all possible. (realise this may be a challenge given where I work, however I do work for a major oil company so hopefully not too big an issue) I'm 54 (wife 48) and would look to pay any loan off in under 10 years - happy to put a 30% deposit down too. Certainly whilst working, I would be non resident, however thereafter not too sure. Guess that depends. Not sure what the pros/cons are to residency and also how that might impact my/our tax situation. Viewing next week so appreciate any steer you can give. Many thanks
George Mitchell - Sun, 4th Aug 2013
Hi Paul, As an International organisation of UK & Spanish Lawyers, Accountants & Tax Advisor's we can supply advice in both the UK & Spain. Non Resident property owners who sell a Spanish property will pay Plusvalia tax (Land Tax) and have a 3% Withholding Tax against the sales value of the property for potential Capital Gains Tax (CGT). If you are a British Tax payer and have a profit on sale then you can declare the CGT in the UK instead of Spain which we can help with.
Mark Roach, Wincham Consultants Ltd - Tue, 2nd Jul 2013
I require some fairly swift advice prior to notarising a pending sale of an overseas holiday home, which has been in the same UK domicile & resident's family ownership for over 30 years. I am awaiting professional advice on the Spanish tax costs, however will require some clarity on what UK tax will be due. Is this something you may bea ble to assist with?
Paul Simmons - Mon, 1st Jul 2013
Hi Mr Shallis, This exemption only applies to Spouses that are 100% Tax Resident of Valencia when they inherit or receive a gift. If the Beneficiary is not a Tax Resident of Valencia then they are Taxed by the Central Tax office in Madrid and not the Region so an allowance of 15,957 is only supplied.
Mark Roach, Wincham Consultants Ltd - Tue, 9th Apr 2013
Hello, could you tell me if the region of Valencia has a 99 % tax relief for gift tax to a spouse? Thank you
R Shallis - Sat, 6th Apr 2013
If you are a Resident of Spain you have a legal obligation to disclose your worldwide wealth and income before end April 2013, and it makes no difference how many bank accounts you have throughout the world.
Mark Roach, Wincham Consultants Ltd - Fri, 15th Mar 2013
Thanks for your reply, but it does not answer my question, to report or not, even the gestor who does my tax return is not sure about the "small print" he is more concerned about the consequences of making an error an incuring penalties. The cost of submitting the report will wipe out any interest earned on our modest accounts in the past year.
Jeff - Thu, 14th Mar 2013
Dear Jeff, This law introduces a new tax declaration to be filed before the end of March each year, starting in 2013. Exceptionally for this year, the deadline has been extended until the end of April. Tax resident individuals, companies and permanent establishments, now have the obligation to file a special declaration disclosing the ownership of all non-Spanish assets. This includes any foreign bank accounts, real estate and rights over properties, shares, loans, annuities and all types of investment assets and products. Pensions are not included. The filing of this annual declaration does not involve paying any tax as it is for information only. However, having given the tax office all this information, they are bound to check that income and wealth has been declared in the relevant declarations! It is really important to mention that this annual disclosure is not just required in the case of simple ownership of foreign assets but also for persons or companies that are beneficia
Mark Roach, Wincham Consultants Ltd - Wed, 13th Mar 2013
Hi there, Very confused at the moment re the asset reporting law, we have several small accounts in the UK including 16k in premium bonds in one of our names, no account above 50k. three accounts are joint which if added 100% to the premium bonds would give one of us an all in total above 50k. I have received conflicting advice so far, is it any one account above 50k, or if the grand total that one person could have access to if above 50k. Thanks for your help
Jeff Friend - Wed, 13th Mar 2013
Hi Alan, You only need to submit this new Declaration in Spain if you are classed as a Resident of Spain and live there for more than 183 days a year. If you are a Resident of Spain you will submit your 2012 Tax Declaration end June 2013 but if you are a non Resident of Spain then your adviser may have been submitting your Declaration incorrect or have made a mistake in asking you to complete by end March 2013. We can review this for you if you send Wincham a copy of your last Tax Declaration in Spain.
Mark Roach, Wincham Consultants Ltd - Mon, 18th Feb 2013
Hi, I wonder if you have any information about this I recieved from my fiscal rep the other day have never recieved this before wondered if anyone else has or has any info on this i do own a house in spain but i am not a resident its a holiday home only The Order in Council number 1558/2012 of the 15th of November, according to the new Antifraud Law, forces all FISCAL RESIDENTS IN SPAIN to declare all properties and rights located abroad, when their value is similar to or higher than 50.000,00 , within the first quarter of the current year 2013, being those assets: Bank accounts held in any bank or financial institution. Properties Securities Rights Insurances Annuities This is an INFORMATIVE DECLARATION and it must be done using the Official form provided by the Administration to this effect. The Declaration must be repeated in subsequent years when there is an increase on the declared amount of 20.000,00 in the previous year.
Alan Ogden - Sat, 16th Feb 2013
Many thanks for your reply.
Paul Attard - Tue, 5th Feb 2013
Dear Paul, Anyone who is a true Tax resident of Spain and lives in a single region for more than 183 days a year and also submit Resident Tax Declarations in Spain every June and declare their worldwide income & wealth are Taxed by the Regions they live in. Each region of Spain sets it's own Tax rates to their Residents and some Regions Tax Spanish Residents more than others. None Residents of Spain are all Taxed centrally by the Central Tax office in Madrid even if they are inheriting a property from a Spanish National or Spanish Tax Resident so in this case the Regional laws and allowances are not allowed to the Beneficiary.
Mark Roach, Wincham Consultants Ltd - Tue, 5th Feb 2013
Our house here in Bizkaia is in my wife's name; she is from here. I am English. We are retired. According to what we understand, the relevant laws here are different to the rest of Spain, because of the historic 'fueros' that Euskadi & Navarra have 'enjoyed' over several centuries. Am I correct???
Paul Attard - Mon, 4th Feb 2013
Dear Stephen, If you bought the property in your own name during November 2012 then you will need to submit the Non Resident Tax Declaration by 31st December 2013.
Mark Roach, Wincham Consultants Ltd - Thu, 17th Jan 2013
So "by the 31st December every year covering the previous calendar year of ownership" would mean, for example, the 31st December 2012 would apply to the period 1st January 2011 t0 31st December 2011? Is this the case? I hope so as I just bought a property in November 2012.
Dr Stephen Murray - Wed, 16th Jan 2013

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