All homeowners in Spain (residents and non-residents) are required to pay this yearly tax to the Town Hall of the corresponding location of the property. The amount of property tax is calculated for each municipality based on the assessed value of the property and applying a tax rate that provides the same Town Hall. The term of payment varies depending on each municipality, although it is usually around the months of September, October and November.
The Capital Gains Tax has been temporarily restored for 2011, 2012, 2013 and 2014, interest will accrue on December, 31st of each of these financial years.
A reduction in the tax base of the minimum exempt amount of 700,000.-€ has been regulated for both residents and non-residents
Therefore, the persons who are required to file are:
The non-resident individual owner of a property must file an annual return for this tax, accruing on December 31st.
The income to be declared will depend on the destination to be given to the property:
1º.- Attributed income from urban real estate for own use.
If the property is for own use, the yield to be declared is the amount that results from applying the assessed value of the property by 2% (in general) or 1.1% (revised for properties with rateable value from January 1st 1994). This performance is subject to a 24.75%. And the deadline for settlement will be throughout the whole calendar year following the date of accrual, until December 31st.
A natural person with residence in Germany is owner of a real estate located on the Balearic Islands destined to private use. The revised rateable value of the property is 140.000€.
B.I. = 140.000€ * 1’1% = 1540.-€
Amount = 1.540€ * 24’75% = 381,15.-€
2º.- Yield of leased properties.
If the property is leased, the yield to declare is the full amount received from the tenant, without deducting any expenses. However, in the case of taxpayers being resident in another State of the European Union, you may deduct the costs provided under the Law of Income Tax for Individuals, on terms to be set *.
These yields are considered to be accrued at the time of being payable by the landlord or at the date of payment (if earlier). On them a 24.75% is paid.
A natural person with residence in the USA (NO EC) is owner of a real estate located on the Balearic Islands destined for rental for 1.200.- €/month.
B.I.= 1.200.-€ * 12 months = 14.400.-€
Amount= 14.400.-€ * 24’75% = 3.564.-€
* The necessary expenses can be deducted for obtaining revenue, if it is duly justified. They are, among others:
3º.- Yield of properties by different type of use.
It should be taxed in proportion to the period the property is intended to rent and own use, to be governed by the rules described above.
A Non-Resident leases the property during the first 6 months (182 days) of the year for 1.200.-€/month and the rest of the year (183 days) the property is destined for own use. The revised cadastral value is 140.000.-€.
Amount= full obtained yield * leased months * 24,75%
Amount= 1.200.-€ * 6 months * 24,75% = 1.782.-€
Amount = prorated cadastral value *1,1% * 24.75%
Amount = (140.000.-€ /365 days * 183 days private use) * 1,1% * 24,75%
Amount= 70.191,78.-€ * 1.1% * 24.75% = 191,09.- €
The deadline for settlement depends on the result:
In case of a transmission of real property, being the seller a non-resident, he is taxed for the Income Tax on natural persons in respect of capital gains. The tax rate is 21% on the capital gain from the sale of the property.
In order to reduce the capital gain, as acquisition costs, the expenses for notary fees, registration, tax paid as well as the improvements that have been performed and thus increase the cost of transmission, can be added.
Being the vendor a non-resident, the buyer (whether or not a resident) is required to withhold and pay to the Public Treasury 3% of the agreed price in a time limit of one month from the sale´s date. The retention only has to be applied to the total of the purchase price of the property, furniture excluded.
This retention has for the vendor the character of a payment on account of the taxes regarding the gains derived out of the transmission. Therefore, the buyer has to hand over to the non-resident vendor the Tax Form 211 (with this form the retention has been paid), so that the vendor may subtract the amount of the retention from the rate which results from the profit statement. If the withhold amount exceeds the amount to be paid, a refund of the exceeded amount can be requested.
In the case this retention is not paid, the property will be burdened with the payment of the amount, which results the minor one between the retention and the corresponding tax.
The vendor is obliged to present the Tax Form 210 within a time limit of three months, to count from the end of the term of payment of the purchaser (one month).
A taxpayer has transmitted an apartment for 340,000 Euros, which he had acquired in 1998 for € 100,000. To calculate the changes in net assets, he will compare:
|Updated acquisition value (as real estate)
(100.000 × 1,2912)
Amount: 210.880€ * 21% = 44.284,8 €
This publication contains general information and does not constitute a professional opinion or legal advice.