Why Paying Taxes Is Important to Any Future Sale of Your Spanish Property

Owning property in Spain as a non-resident is a dream for many, but it comes with important responsibilities - especially when it comes to taxes. Staying on top of your taxes, even as a non-
resident, isn’t just about avoiding penalties; it’s also crucial if or when you plan to sell your property in the future.

In this blog post, we’ll be explaining why paying your Spanish property taxes is essential and how it could impact your future sale. Plus, we’ll show you how IberianTax can make the non-resident tax
process hassle-free and affordable.

Understanding Non-Resident Property Taxes in Spain

As a non-resident property owner in Spain, there are a few key taxes you need to pay:

1. IBI (Impuesto sobre Bienes Inmuebles):

This is the annual property tax paid to your local municipality. It’s based on the cadastral value of your property.

2. Non-Resident Taxes:

If you rent out your Spanish property, you’ll need to declare any income, but even if you don’t rent out your property, Spain considers it as generating imputed income. You must file and pay this tax annually.

3. Capital Gains Tax (CGT):

When selling your property, you may need to pay CGT on the profit. Non-compliance with your annual taxes can complicate this calculation.

4. Local Plusvalia Tax:

In addition to Capital Gains Tax, you’ll also need to pay Plusvalia Tax. This is the tax applied to the increase of the value of urban land once the property has been transferred, sold or inherited. This tax should be retained by the buyer at the time of the sale and deposited to the tax authorities (by the buyer).

How Unpaid Taxes Can Impact Your Sale

If you’re thinking of selling your Spanish property, unpaid taxes can lead to significant complications for both you and the buyer:

• Delays in the Sales Process:

Before completing the sale, buyers or their lawyers will carry out due diligence. If unpaid taxes are discovered, the sale may be delayed until these debts are cleared, or even worse, the seller may decide to pull out of the sale entirely.

• Liens on the Property:

Spanish authorities can place a lien on properties with unpaid taxes, making it difficult -or even impossible - for you to sell.

• Buyer Risks:

If outstanding taxes aren’t resolved, the buyer might inherit these liabilities. This could make your property less appealing and result in lower offers or a loss of potential buyers.

• Increased Costs for You:

Penalties, interest, and legal fees for unpaid taxes can significantly reduce your profit from the sale.

Benefits of Staying Tax-Compliant

Paying your taxes on time as a non-resident brings multiple benefits, especially when you’re planning to sell it later down the line:

1. Streamlined Sales Process:

Resolving your tax obligations in advance ensures smooth transactions without last- minute surprises.

2. Enhanced Buyer Confidence:

Buyers are more likely to move forward with a clean, well-maintained property that’s free of legal complications.

3. Maximised Profit:

By avoiding fines and interest, you’ll keep more of the proceeds from the sale in your pocket.

Simplify Tax Compliance with IberianTax

Managing taxes as a non-resident property owner in Spain can feel overwhelming, but it doesn’t have to be. With IberianTax, you can enjoy peace of mind knowing that your tax obligations are handled by experts. Here’s how we can make your life easier:

• Stress-Free Tax Compliance: We’ll take care of everything - from calculating your annual taxes to filing your returns and making payments. No confusing forms or unnecessary complications.
• Affordable Service: Avoid expensive solicitor fees while still receiving excellent service. We offer a cost-effective solution from just 34.95€, that’s tailored specifically for non-resident property owners like you.
• Guaranteed Accuracy: Our team of tax professionals ensures every detail is correct, so you never have to worry about fines, interest, or other penalties.
• Customer-Focused Support: Have questions? Need advice? Our friendly team is here to help you every step of the way, whether it’s your first time filing or you need assistance.

Protect Your Future Property Sale by Paying Your Taxes

Paying your taxes as a non-resident property owner in Spain is more than just a legal obligation - it’s a smart move to protect your big investments. Ensuring compliance now will save you time, money, and stress when it comes to selling your property in the future.

Ready to Simplify Your Tax Obligations?

Don’t let tax compliance hold you back. Contact IberianTax today and let us take the hassle out of managing your non-resident property taxes. Our experienced team is here to help you every step of the way.