Do I have to pay tax on a second home in Spain? 2022
September 20, 2022
If you have a second home in Spain, you must pay non-resident income tax in Spain on your property, even if you live abroad and do not generate any income from it.
In this article, you will find a summary of the most common situations where a non-resident taxpayer must file a tax return for having a property in Spain.
Do I have to pay tax on my Spanish property?
I do not rent my property:
You are required to file the annual non-resident tax return to declare an imputed or deemed income on the property (even though you do not generate any income from it).
The imputed income consists of 2% of the cadastral value of the property or 1.1% if a general revision of the cadastral values has taken place in your municipality within the previous ten years.
I partially rented out my property in 2021.
You are required to file the annual non-resident tax return on imputed income but only for the days during which the property was NOT rented. For example:
In 2021, Petra and Markus spent 30 days in their second home in Mallorca. For the rest of the year, the property was rented out. They will have to declare in 2022 an imputed income on the property for 30 days, that is during the period where the house was not rented. In addition, in 2021, they had to declare the rental income quarterly.
I rented my property the entire 2021 (365 days rented)
You are not liable to file the annual tax return on imputed income as the property was rented out for the entire 2021 tax year. Instead, in 2021 you had to declare the rental income quarterly.
I bought my property in 2021.
You are required to file the annual non-resident tax return to declare an imputed income on the property from the purchase date to the 31st of December 2021.
As a case in point, let’s look at the situation in which a non-resident taxpayer, Timothy, bought a property in Marbella on 15th November 2021. He did not rent the property nor use it until the end of the year. Timothy must report in 2022 an imputed income on the property from the purchase date to 31st December.
I sold my property in 2021.
Like the previous scenario, you are required to file the annual non-resident tax return to declare an imputed income on the property from the 1st of January 2021 to the sale date.
For any of the scenarios above, the relevant form is “Modelo 210”. If you want to know more about this tax form check this article out.
Amount of tax payable on a second home
How much non-resident tax you have to pay on your second home in Spain depends on:
- The cadastral value (“Valor Catastral”) of your second home according to the last local tax receipt.
- The municipality where the property is located as it defines the applicable imputed percentage as 2% or 1.1%.
- The country of tax residency as it defines the applicable tax rate (24% or 19%).
Let’s give a clear calculation example for the 2021 tax year:
- Cadastral value: 45986.60€
- Municipality > Mijas (Malaga): 2% imputed percentage as the last general revision from Catastro has not taken place within the past 10 years. Source: Agencia Tributaria website.
- Tax Rate > United Kingdom: 24% (non-EU)
- The property was not rented in 2021.
Tax Liability = 45986.60 x 2% x 24% x 365/365 = 220.73€
As detailed above, the final tax due would amount to 220.73€ which should be split among the number of owners considering the ownership stake.
Other taxes you must pay on your Spanish property
Local Property tax
Besides the non-resident tax, property owners must also pay a local tax on their Spanish property usually known as IBI. The municipality where your second home is located will inform you of the property tax payable. This tax is levied by the Ayuntamiento or by the regional tax authority (Patronato, SUMA, etc.).
With the exception of some regions such as Andalusia and Madrid, non-residents may be liable to Wealth Tax when the acquisition value of the property exceeds a certain amount (usually €700,000).
If you have any other questions or need further assistance, please do not hesitate to contact firstname.lastname@example.org.