When do I need to file Spanish deemed income tax return?
If your property is an urban property but
not let, you must still pay 24% tax on ‘deemed’ rental income. In case the
property is let partially Spanish Deemed income tax is applicable only for the
period in which property was vacant or occupied by owner for personal use.
How is the Spanish deemed income tax calculated?
Deemed rental income is calculated at 2% (or 1.1% if the value was revised after 1 January 1994) of the rateable (catastral) value of your property. For example if the value of your property per IBI receipt is €200,000 and property is not let during whole tax year, you will pay €960 Income Tax
What is cadastral value of the property?
The catastral value of your property is the value set on your property by the local Town Hall. It is used for calculation of the local property taxes (rates) and Spanish Deemed letting income tax.
Catastral value usually vary between 50%-70% of the market value of the properties. Many local authorities are now reviewing catastral values and you can identify if/when this happens from your last Local Building tax (IBI – Impuesto sobre Bienes Immuebles) receipt where you will find it displayed
When is the deadline for filing Spanish deemed income tax return?
Spanish Deemed Income Tax declarations must be filed before 30
th of June in the year following the relevant tax year e.g 2009 Spanish deemed income tax is due by 30
th of June 2010.
What expenses are allowable against rental income for the Spanish rental income tax returns?
Up until December 31st, 2009 non-residents were obliged to pay income tax at 24% on gross rental income with no deductions permitted for expenses incurred in connection with letting or maintaining a property.
Following a ruling in March 2010 by the European Court of Justice non-resident property owners can now deduct all eligible expenses incurred in connection with lettting or maintaining their property.
When is the deadline for filing Spanish rental income tax?
Income must be declared and taxes paid within a month of receiving rental income in Spain. Alternatively quarter Spanish Rental income tax returns could be filed. Annual Spanish Rental Income tax returns are accepted only when you receive rental income annually.
When was the Spanish wealth tax abolished?
Spanish wealth tax was abolished effectively as from January 1st 2008. If you have failed to report Spanish wealth tax to the Spanish tax authorities previously you still need to do this at the moment in order to have all your tax matters in order.
When was the rate changed for Spanish Capital Gains Tax?
Spanish Capital Gains Tax rate was 35% as up to 31st of December 2006. The new and currently effective rate is 18% on the taxable gain.
Am I entitled to a Spanish Capital Gains Refund?
Under Spanish law, in case the seller is non-resident the purchaser must withhold Public treasury tax at 3% of the purchase price and pay it over to the tax within a month of transfer. A reclaim may be required if the 3% paid exceeds the final Spanish
Capital Gains Tax liability.
The Spanish Capital Gains Tax return should be filed and paid within three months of the withholding tax payment.
What are the consequences if i do not declare ?
Any non-resident that wishs to sell their property , a percentage of the sale value will be witheld by the buyer.This money will be deposited with the Spanish Tax office on account of the capital gains tax. If you have not submitted annual returns , the Tax office may refuse to issue the refund that is due.
