If you’re looking for Spanish villas you have to be informed about the personal taxes you’ll have to pay.

INCOME TAX

Residents

This tax is applied for Spanish residents, living in Spain more than 183 days per year, on their world earnings, and they have to complete an Income tax form every year, during May or June of the following year.

People earning more than € 21,035.42 a year in Spain, are obliged to make the income tax declaration and a progressive tax structure is applicable to the world income of the year, with a starting rate of 17 % up to 48 %.

Is recommendable to ask your gestor or lawyer for help and advice on your annual declaration tax.

In order to avoid the double taxation, Spain has made tax agreements with different countries; it’s useful for example if you live part of the year in yourSpanish villaand the rest of the year in England. These agreements allow you to deduct the income tax paid in your country. If your country does not have this agreement you can ask for direct deduction of foreign tax paid or foreign compensation.

Non-residents living in Spain more than 183 days are considered Spanish tax payers, even if they have not obtained their residence permit and have to declare their worldwide income to the Spanish Tax Department (Hacienda), completing the same forms as the Spanish residents.

The Spanish Tax Ministry is called AGENCIA TRIBUTARIA, and has a telephone Information Services to help the tax payers and also the possibility of making the Income tax online, using a computer program named P.A.D.R.E. Other option to make your Income tax when you’re living in Spain, is presenting the Tax Forms in the Tax Office where you live or, if you don’t know how to fill the forms, use the service the Agencia Tributaria offers: make an appointment with a Spanish tax agency staff who will process your Income Tax documents online, helping you to plug your declaration into the PADRE program(remember to take with you all the receipts, bank statements, title deed of your property to the tax office)

1. Telephone for online Income tax: 901 33 66 33
2. Telephone for making an appointment with a tax agency staff: 901 22 33 44
3. Telephone for answering queries: 900 333555 (free call)

When your tax declaration is ready, you can present it at the Tax Agency or at your Bank.

Non-residents

Non-residents are liable for this tax on any Spanish income, such as a money deposit with a Spanish bank, an income derived from any business in Spain…

Buying villas in Spain constrain you to declare your property income, and the Spanish tax system calculate the tax amount based on the cadastral value (valor catastral), Tax base rate is 25% of a 2% of the cadastral value, and is paid every year.

Remember to pay this Income tax every year, if not, probably you will be charged by the Spanish Tax Agency when you want to sell your Spanish villa in the future.

For more information visit the Agencia Tributaria for non residents www.aeat.es/normlegi/noreside/english/home.html

FORM NON RESIDENTS 211 , 212, 213 y 214

CAPITAL GAINS TAX (Beneficios) 

Capital gains mean that the value of your assets is increased as the result of the sale of your property and is subject to taxation. When a change in ownership of a Spanish villa takes place, the income is considered due for tax. The taxable amount is the difference between the purchase value declared on the property deed and the value to be declared on the sale property deed, excluding interest rates and taxes related to the purchase process.

The Spanish tax administration applies a formula base on the date of purchase of the Spanish villa. The consequence is that the Capital gains are reduced in accordance with the number of years you own the property.

A Non resident owner of a Spanish villa offering it for sale will pay 35% on the net gain after selling it, and a retention of 5 % will be made by the buyer in the registered sales price and this amount will be paid to the Spanish tax agency as a guarantee for tax payments, in order to avoid that the non resident seller “forget” to pay the Capital tax Gains.

Once the Spanish villa is sold, residents will pay 20% on the net gain and it is not necessary to make a retention on the sales price, including the capital gains on the next annual Income tax Declaration

WEALTH TAX (PATRIMONIO)

Spanish residents and also non resident owners of Spanish villas are liable to pay wealth tax on their worldwide assets and property in Spain. This tax is paid in May/June of the following year, in addition to the Income tax Declaration.

• Non Residents pay this Spanish tax without deductions
• Residents have deductions in their worldwide assets:

• Individual allowance: €108,182.18 (€216,364.36 for a married couple).
• Own property: rise to €150,253.03 (€300,506.06 for a married couple when the property is the main residence).

The wealth tax applies only to assets with a value above 170,000 euros. The tax rate starts at 0.2% and rises to 2.5% for properties with a value above 10,695,996 euros. The value of your Spanish villa is the official catastral value included in the IBI receipt

Wealth tax rates in Euros: