Ripoll Abogados


Non Resident tax, again

The first question to clarify is the difference between a resident and a non-resident in Spain, for tax purposes.

Many foreigners believe that they are residents in Spain because they live here most of the year. However, this does not imply that you are a resident in Spain in terms of tax residence.

If you live in Spain but your source of income for example is a foreign pension and therefore your government deducts your taxes from the pension you receive in your country, you are not a tax resident. Even though you pay the taxes related to the ownership of your property here, such as property tax collected by SUMA. It does not mean that you are a resident in Spain for tax purposes.

Apart from property tax, a Non-Resident owning a property in Spain is obliged to pay another tax every year, before the 31st December. This tax, called Non-Residents Income Tax is like a self- assessment, meaning that you will not receive an invoice from SUMA as it happens with the property tax but, you have to complete a Form with your details and those of your property, calculate the tax, pay it and deliver the Form to the Tax authorities.

Our experience is that this tax is unknown to most foreign owners, but it is still a tax you are obliged to pay.

The reality is, when you sell your house and ask for the refund of the amount that the buyer is obliged to deduct from the price ( 3%), the authorities will put all kinds of obstacles in your way to try to keep the money and will charge you a penalty for the years you have not paid the tax.

If this is your case, now you have time enough before the 31st December 2017 to contact a professional. They will assist you in arranging the payment of this tax obligation, and they only need to see the last property tax receipt from SUMA. On the receipt, it will say the valor catastral, which is assessed by the authorities for your property and will be the one used as the basis for calculating this tax.