Everything You Need to Know About Non-Resident Taxes in Spain
If you’re considering purchasing a property in Estepona or elsewhere on the Costa del Sol, it’s essential to understand your tax obligations as a non-resident. Knowing what taxes you’ll face can help you make informed financial decisions and avoid unexpected costs down the line.
At Paraiso Real Estate, we strive to support our clients by providing comprehensive information and guidance on all aspects of property ownership, including tax responsibilities. Below, we outline the most important taxes you’ll encounter as a non-resident property owner in Spain and how they might impact you.
Understanding Non-Resident Tax Obligations in Spain
Non-residents who own property in Spain are subject to a variety of taxes at both the national and local levels. These taxes are applicable whether you’re renting out your property or simply holding it as a personal investment. By understanding these obligations, you can avoid penalties and make the most of your property investment on the Costa del Sol.
Key Non-Resident Taxes You Should Know About
- Imputed Income Tax (IRNR)
Even if you do not rent out your property, you will still need to pay an annual Impuesto sobre la Renta de No Residentes (IRNR), or Imputed Income Tax. This tax is a notional income calculated as a percentage of your property’s cadastral value (government-assessed value). It’s considered a form of tax on the assumed rental income you could earn, even if you don’t actually rent it out. The rate varies depending on your residency status:
- EU/EEA Residents: 19%
- Non-EU Residents: 24%
This tax is filed annually using the Modelo 210 form and is important to stay on top of, as failure to pay can result in penalties from the Spanish tax authorities.
- Rental Income Tax
If you choose to rent out your property, any income earned will be subject to Rental Income Tax. This tax is calculated on the gross rental income, with deductions allowed for EU/EEA residents for expenses such as maintenance costs, mortgage interest, and utility bills. However, non-EU residents are taxed on the full rental income without deductions.
- Tax Rate for EU/EEA Residents: 19%
- Tax Rate for Non-EU Residents: 24%
The rental income tax is declared quarterly, making it crucial to maintain accurate records and receipts for all income and expenses.
- Capital Gains Tax
When you sell your property in Spain, you’ll need to pay Capital Gains Tax on any profit made. The capital gains tax for non-residents is subject to a flat rate of 19% on the profit made and it is the same for EU and non-EU tax residents.
- Property Tax (IBI – Impuesto sobre Bienes Inmuebles)
The IBI is a local property tax payable to the town hall of the area where your property is located, for example, Estepona or Marbella. It is calculated based on the cadastral value of your property and varies depending on the municipality. In Estepona, for instance, the rates are reasonable, but it’s important to check with the local council for specific figures. This tax is due annually and helps fund local services like road maintenance and community projects.
- Rubbish Collection Tax (Basura)
The Basura tax is another local tax and is used to cover waste collection services in your local area. The amount varies depending on the municipality and the size of the property. In Estepona, you’ll receive an annual bill for this service, and it’s important to keep up with payments.
Additional Costs to Consider
As a non-resident property owner, you may also encounter other costs, such as community fees if your property is part of a development or urbanisation, maintenance expenses, and insurance.
Non-Resident Property Taxes Made Simple with IberianTax
IberianTax has years of experience and a focus on simplifying non-resident tax filing. They provide a hassle-free solution that has been designed specifically for property owners in Spain to file their Modelo 210 tax returns, be that Imputed Tax, Rental Income Tax or Capital Gains Tax.
Why Use IberianTax?
Free Registration and Access to Tools
By signing up for free with IberianTax, you gain access to a range of useful tools and resources. Use the tax calculator to estimate your liabilities, consult the help desk for any questions you have, and receive guidance from tax experts on complex matters.
Fast, Easy, and Affordable
Their platform allows you to file your taxes quickly and efficiently. The intuitive interface means you can navigate the entire process in just a few clicks, making tax filing stress-free. Their prices start as low as €34.95, making it an affordable alternative to potentially expensive accountants or tax advisors.
User-Friendly Platform
Available in English, German, and French, IberianTax’s platform eliminates language barriers and simplifies that ever-confusing tax jargon. This ensures that even if you’ve never filed a tax return before, you can do it without confusion or complications.
Security and Privacy
All personal data is securely encrypted, ensuring the privacy and protection of your financial information throughout the filing process. IberianTax is also fully certified and approved by the Spanish tax authorities (Agencia Tributaria), giving you peace of mind that your tax filings are accurate and compliant.
For more information, simply visit IberianTax. You can also check out their Google reviews for proof that filing with IberianTax couldn’t be easier!
Why Estepona and the Costa del Sol are Ideal for Property Investment
Estepona and the Costa del Sol are not only popular tourist destinations but also attractive locations for property investment. With its beautiful coastline, excellent infrastructure, and vibrant community, the area provides a unique blend of lifestyle benefits and investment potential. The local real estate market has shown resilience and steady growth, making it an excellent choice for those looking to invest in property abroad.
Whether you’re looking for a holiday home, a rental property, or a long-term investment, Estepona’s diverse property market has something for everyone. With new developments and luxury properties available, there’s never been a better time to explore the real estate opportunities on offer!
How Paraiso Real Estate Can Help
Paraiso Real Estate is dedicated to helping clients find their dream homes on the Costa del Sol. With our deep local expertise and extensive Estepona property portfolio, we make it easy to explore options that suit a variety of lifestyles, whether you’re looking for a holiday home, a permanent residence, or an investment property.
We take pride in offering a personalised service that ensures every step of your property journey is seamless. Get in touch with us and see how we can help you achieve your property goals in this stunning region of Spain!