Page 19 - A guide to buying a new property in Valencia

A Guide to buying
COMMUNITYOFVALENCIA
new property in the

Personal taxation and

scal representatives

8.

Both residents and non-residents owning property or investments in Spain are

under an obligation to le tax returns there. This is done yearly and on a

self-assessment basis.

An individual is considered to be non-resident if he or she does not remain

in Spain for more than 183 days in the calendar year and if the main base for

his or her economic interests lies outside Spain.

The following taxes are payable by non resident property owners:

1. Wealth Tax (Impuesto sobre el Patrimonio)

Spanish wealth tax, known as impuesto del patrimonio, has recently been

reintroduced, but with a much higher tax-free allowance of € 700,000

per person that also applies to non-resients.

2. Income Tax (Impuesto sobre la renta)

For non-residents this tax may involve paying income tax on investments

held, including interest on funds on deposit in bank accounts, and letting

income from properties at a basic rate of 24.75%. However, in the case of

tax residents, if this income is generally under about € 7,500 then there is

no obligation for a non-resident to le a return.

Regardless of the above, a non-resident owning real Estate in Spain such

as a Holiday home, is always under an obligation to le an income tax

return based on the “notional” income which he or she is considered to

have from it by the tax authorities. This “Notional Income tax” is payable

even if you do not rent your holiday home out to others. The amount of

income, which the tax authorities consider the property owner receives,

is 2% of the value of the property calculated as above. The taxpayer will

then have to pay tax at 24.75% of that 2%.

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