This article is intended to act as a brief tax guide for private individuals who are non-tax resident in Spain and who are thinking about buying a holiday home in Spain.

First of all, it is important to remember that, in the vast majority of cases, Double Taxation Treaties and the Spanish Personal Income Tax Act regard a private individual as a Spanish tax resident when at least one of the following criteria is met:

• • They spend more than 183 days in Spain in a single calendar year. When determining the period of stay, temporary absences are included in the calculations.
  • They have Spain as their main base or centre of activities or economic interests.
  • It is presumed, unless proven otherwise, that a taxpayer’s habitual place of residence is Spain when, on the basis of the foregoing criteria, the spouse (not legally separated) and underage dependent children permanently reside in Spain.

So, if you do not meet one of the criteria above mentioned, you will be considered as non-tax resident in Spain.

In this regard, let’s take a look at the main taxes payable for the ownership of a real estate property in Spain:

1. 1. Tax on Income earned by Non-Residents (IRNR): this obligation arises for those non-resident taxpayers who own an urban property in Spain that is intended as a holiday home or is unoccupied. This obligation is fulfilled by filing an annual tax return using Form 210. Tax accrues on 31-12 of each tax year, and Form 210 can be filed during the calendar year following the date of accrual. The tax amount to be paid is based on the cadastral value that appears in the Municipal Property Tax (IBI) statement. The tax base is either 2% or 1% of this cadastral value, depending on whether the City Council has revised its cadastral values within the last 10 years, and then a tax of 19% (for EU residents) or 24% (for non-EU residents) is payable on this amount. It can only be paid in one instalment.
   2. Wealth Tax: this tax is payable by non-resident taxpayers who own real estate in Spain. This obligation is fulfilled by filing an annual tax return using Form 714. Tax accrues on 31-12 of each tax year, and Form 714 is filed between the months of April and June of each year following the year of accrual. The tax system is simple: to calculate the net asset figure, once the assets in Spain (real estate) have been added together, only the charges and encumbrances affecting them, together with any debt for capital invested in the real estate in question, will be deductible. An exempt minimum of 700,000 euros must then be subtracted from this figure. The remaining amount is subject to a tax rate ranging from 2% (for the first 167,129.45 euros) to 3.5% (when net assets exceed 10,695,996.06 euros). It can only be paid in one instalment.
   3. Municipal Property Tax (IBI): this tax, which is levied by the City Council, is payable by the owner of any urban or rural property. The IBI amount to be paid is calculated on the basis of cadastral value, and the tax becomes due on 01-01 of each tax year. The payment slip is issued directly by the respective City Council. There is no need to submit a tax return or form. It can be paid in one instalment or in several instalments by direct debit from your Spanish bank account.

 In summary the taxes to be paid in Spain would be the following:

If you are thinking of buying a holiday home in Spain, Ventura Garcés offers legal and tax services to help you to avoid any kind of difficulties or surprises with the taxes involved.