AS we do every New Year, we wish to remind readers who are Non Residents for tax purposes in Spain and own a property here that even if they simply visit for holidays and earn no Spanish income, they are still required to pay Non Residents Tax based on the value of their property.
If you are non-tax resident in Spain or even if you live in Spain but are not registered with the tax office as a tax resident or you do not submit taxes as tax residents, you could be legally considered as Non Tax Resident, even though no notice has been given to the Tax Authority.
Non Tax Residents could be liable to pay Wealth Tax, but only if the value of their assets in Spain (after deducting debts, eg pending capital of the mortgage, etc) is above €700,000.
If you are Non Tax Resident in Spain (or you are not legally tax resident in Spain), you will need to pay tax for income in Spain (Income Tax for Non Residents, IRNR): eg income from a letting, interest on bank accounts, etc.
If you do not have any income but you own a property or a share on a property, your tax bill will be based on a calculation as per the Cadastral Value (the value that appears on your Spanish Local Rates receipt from the town hall, the SUMA office or the equivalent).
Even now it is quite common for people who are Non Fiscal Residents in Spain (or not legally Tax Resident in Spain) to simply not pay this tax; usually due to ignorance or neglect and especially when they have no income in Spain and only own a house.
Please note however that if you let your property in Spain, you have an obligation to submit the tax returns and pay tax every three months and not just once a year.
If you are not sure if you are legally or officially tax resident or non-tax resident and if you want to know what is the most convenient for you, we can assist you by reviewing your personal situation.
If you are non-tax resident, do not forget to meet your tax obligation if you want to avoid a possible tax inspection which could result in penalties, etc. Contact us and we will help you.
The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.