What taxes do Spaniards living abroad pay in Spain?

According to INE data, the number of Spaniards living abroad reached 2,742,605 on 1 January 2022. This is a significant and growing figure that has implications in several areas, including taxation.

Spanish Expats are also liable to Spanish taxes

It is common for Spanish Expats (like many other non-residents of Spain) to wonder whether they have to pay taxes in Spain if they live abroad. There is a widespread belief that if you live abroad you only pay taxes in your country of residence. This is only correct in certain cases. A high percentage of these Spanish citizens must pay taxes in Spain despite their status as non-resident taxpayers. This happens, among other cases, when the citizen maintains economic interests in Spain either in the form of income or assets. In particular, the obligation to pay tax in Spain remains for all those Spanish citizens residing abroad but owning a property in the Spanish territory, either for personal use or for rental purposes. 

If the property is for personal use, non-resident Spaniards, as is the case for non-residents of any other nationality, must declare an annual imputed income on the property regardless of whether or not they generate any income from it.

In general terms, the amount to be declared is 2% of the cadastral value of the property. However, this percentage would be reduced to 1.1% of the cadastral value in those cases where the property is located in a municipality where the cadastral values have been revised in the last ten years. A tax rate of 19% is applied to this amount for Spaniard residents in the European Union (EU) or European Economic Area (EEA) countries, or 24% for the rest of the cases.

Thus, for example, if a Spaniard resident in the UK has a property in Spain with a cadastral value of €100,000, he/she would have to pay between €264 and €480 per year depending on the municipality where the property is located. 

On the other hand, in the case of rented properties, non-residents must declare the income obtained quarterly, without the possibility of deducting the related expenses unless they are residents in the EU or EEA.

Thus, following the above example, a Spaniard resident in the UK who rents a property in Spain at a monthly rate of €1,000, will have to pay the sum of €720 per quarter to the Treasury for Non-Resident Income Tax, i.e. €2,880 per year. And this, regardless of the expenses associated with this rent, given that the regulations do not allow the deduction of expenses in these cases, which significantly increases the tax burden for this group.

Important note: Starting from the 2024 tax year, the declaration of rental income will shift to an annual basis, with the deadline for submission set between January 1st and January 20th of the following year. 

How is Non-Resident Income Tax declared?

In both cases, the tax is self-assessed using Form 210, the form that brings together the returns of non-resident taxpayers. 

In order to file the tax directly online, you need a digital certificate and some knowledge of the Tax Agency's website. However, there are also online solutions that make it easier to file Form 210 quickly and online.

Who is a non-resident in Spain?

The regulation does not establish a definition of "non-resident", but that any person who does not meet the requirements to be considered a tax resident in Spain, i.e. who does not meet any of the following circumstances, is a non-resident:

- That he/she stays in Spain for more than 183 days during the calendar year.

- That the main source of income is located directly or indirectly in Spain.

Likewise, it will be presumed, unless proved otherwise, that a taxpayer is habitually resident in Spain when, following the above criteria, the non-legally separated spouse and dependent minor children are habitually resident in Spain.