Taxes and Fiscal Obligations
Accounting services with Clarity, we must first consider if you are a tax resident here in Spain or in your own country. Irrespective of whether you have a green residency card, if you file your tax returns outside of Spain you are considered a non-resident for tax purposes. If you reside in Spain for more than 6 months a year you are automatically a tax resident and as such should file you tax returns here.
Some information may be different for British nationals post Brexit. more here
Annual Property Taxes
Each property has a catastral value which forms the basis of your property tax calculations. The higher the catastral value the higher the taxes you will pay.
Rates and Rubbish
Each town hall will prepare the rates (IBI) and rubbish collection (Basura) taxes for all property owners in their municipality. Irrespective of the month in which these contributions are charged they correspond to that natural year.
Which is to say from the 01st of January to the 31st of December. Even though communications maybe sent by post, the town hall does not have the obligation to ensure you are notified of these taxes.
The onus is on the property owner to set up these payments as direct debit or to visit the town hall for the correct payment cards.
The town hall will not change the name on a bill midyear, nor will they proportion the bill.
The bill will be produced in the name of the owner on the 01st of January. After a change of ownership the bills from the following years will appear in the new owner’s name.
This tax is paid to the state tax authorities and cannot be set up as a direct debit. This tax must be calculated each and every time a payment is due. The forms filled in and filed and the corresponding payment made.
If the property is not rented, the tax should be paid in the second half of the year and corresponds to the previous year. For example tax paid in November 2014 is for the whole natural year of 2013.
If the property is rented, the tax should be paid at the end of each quarter. In this case, the catastral value does not form the basis of the calculation, instead the income and costs from the rental are used.
Please note that the year of purchase and the year of sale will reflect a percentage of the days owned in those particular years and charged accordingly.
If you are a fiscal resident of Spain. You are exempt from paying this tax.
Please note if you own property in other countries outside of Spain. You should contact a tax advisor in that country to explain you are a non-resident property owner. To seek information on if a similar property tax applies in that country.
Other Property Taxes
Taxation upon Transfers, and Economical and Legal Acts
Nearly each and every time a deed or act is signed before a Spanish notary public the correct tax forms must be filled in and filed, and any taxes due paid within 30 days of the date of granting the deed.
Stamp duty on a second hand property is 6.5% of the value, brand new properties are taxed at 1% plus 7% IGIC (VAT equivalent).
Increased Land Value Tax (Plusvalia)
“Impuesto de Incremento de Valor de Terrenos de Naturaleza (IIVTN or Plusvalia Municipal)”, is a tax paid to the local town hall that cannot be arranged by direct debit or paid annually.
A month after the transmission of a property (sale, donation, acceptance of inheritance, dissolve of co-ownership etc) the bill will be generated. This is a tax that should be paid by the transmitter / vender of the property.
If the vendor / transmitter is a non-resident due to the unavailability of this entity after the property transfer.
The bill will come to the new owner of the property and therefore sufficient funds must be retained from the vendor to cover this payment. In the cases of inheritance the bill will come to the new owner.
Plusvalia is calculated using the catastral value of the property and the number of years that have passed since the last transmission.
- Tax residents of Spain declare any profits made on property transmissions in their annual tax returns. Non-residents will have had retained from them 3% of the property value at the moment of property transmission, which then becomes the obligation of the new owner to ensure its payment to the government.
- The non-resident transmitter of the property has the obligation to file their capital gains paperwork within 3 months of the date of transmission.
- Costs such as estate agency fees, notary, legal, registration fees etc can be used to off-set profit made.
- If no profit has been made, the obligation still exists to file the paperwork.
- The 3% down payment will be taken into account, the result being either a further payment or a refund. Refunds are not immediate, first the tax authorities check for any outstanding payments such as traffic fines, unpaid property taxes etc, which will be discounted first before any funds are returned.
- This process usually takes a couple of years.
- Since the calculation of this tax is not simple as it requires civil knowledge and fiscal experience of how assets are awarded.
- It is advisable for the administration and payment of this tax to be arranged by a specialist lawyer of this field or a tax official who will be aware of the current legislation and possible reductions.
- For more information please contact us for a consultation.
- Most residents of Spain have the obligation to file their tax returns, although there are some exceptions.
- Income is reduced by offsetting costs to give you the taxable basis on which your income tax is calculated.
- Depending on your personal and fiscal situation you may be entitled to a refund of down payments of tax already forwarded.
- Businesses and self-employed persons also have the obligation to file the corresponding forms related to IGIC (VAT equivalent), offsetting the IGIC paid out against the IGIC charged to their customers.
- We offer a full and comprehensive accountancy service to aid all businesses. And self-employed persons fulfil correctly their fiscal obligations and manage their tax affairs.
- For more information please contact us for a consultation.
“Impuesto sobre Vehículos de Tracción Mecánica (IVTM)”.
Each town hall will prepare the bill for all vehicles which are registered to that municipality. Irrespective of the month in which these contributions are charged they correspond to that natural year. Which is to say from the 01st of January to the 31st of December. And will be in the name of the vehicle owner on the first day of the year.
Therefore if you see a car on the 02nd of January. Later that year when the window to pay this contribution opens. The tax on the car will be due in your name.
Even though communications maybe sent by post. The town hall does not have the obligation to ensure you are notified of these taxes. The onus is on the vehicle owner to set up these payments. As direct debit or to visit the town hall for the correct payment card.
If you are buying or selling a car. The correct tax forms must be filled out. Filed and the corresponding taxes paid as part of the paperwork process to change the name on the title.
If you declare a low value for the vehicle, lower than the book price. And pay the tax corresponding to this low value. You are at risk of receiving a demand for further payment.
These taxes depend on whether a car is new or is used, the vehicle’s power, and its intended use.
For a quote please forward to us the specifications of the vehicle.
If you have a question or query on any of the above,or any other issue not covered above then feel free to contact us