# Tax Question? Spain



## BigD (Jan 29, 2011)

Hi everyone I need some advice please. My wife and I own a property in Nerja but are non residents. We have been advised by our Spanish legal reps that we are liable for "wealth tax" for the year 2010. When pressed we were told that because we are non resident the authorities presume that we let the property so they charge tax based as a percentage of the properties value. Further we have been told that failure to pay before the end of the year will result in a 20% surcharge! The property is worth approx. €100,000 
Having searched the Internet there is plenty of information but it's all a bit confusing? Anyone got any experience of this?


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## xabiaxica (Jun 23, 2009)

BigD said:


> Hi everyone I need some advice please. My wife and I own a property in Nerja but are non residents. We have been advised by our Spanish legal reps that we are liable for "wealth tax" for the year 2010. When pressed we were told that because we are non resident the authorities presume that we let the property so they charge tax based as a percentage of the properties value. Further we have been told that failure to pay before the end of the year will result in a 20% surcharge! The property is worth approx. €100,000
> Having searched the Internet there is plenty of information but it's all a bit confusing? Anyone got any experience of this?


can't comment on the figures - but yes, if you don't live in it they do assume you are earning rental from it & you do have to pay a tax on the presumed rental afaik


I'm sure someone more knowledgable will come along with clearer info soon


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## Beachcomber (May 10, 2009)

Wealth tax was suspended in 2008 but has recently been re-introduced on a more limited basis and a property of that value would not fall into the bracket.

Assuming you do not actually rent out your property your liability as a non-resident is to pay non-resident imputed or notional income tax which is calculated on the valor catastral of the property at about 0,26%.

The tax office can go back four years for unpaid taxes and there are likely to be fines and surcharges for the years during which the tax has not been paid.

You can complete and submit the forms yourselves but the procedure is changing from next year onwards.


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## xabiaxica (Jun 23, 2009)

Beachcomber said:


> Wealth tax was suspended in 2008 but has recently been re-introduced on a more limited basis and a property of that value would not fall into the bracket.
> 
> Assuming you do not actually rent out your property your liability as a non-resident is to pay non-resident imputed or notional income tax which is calculated on the valor catastral of the property at about 0,26%.
> 
> ...


I knew someone who knew what they were talking about would come along


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## BigD (Jan 29, 2011)

Thank you. Our bill seemed a bit steep so we've asked our adviser for a breakdown as we suspect their charges are quite high!


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## Beachcomber (May 10, 2009)

If the value of your property is €100.000 let's assume your valor catastral is around €60.000. In this case your total tax liability would be €158,40.

I reiterate that you can do it yourself either by obtaining the necessary forms from the tax office or by using the online forms here:

http://www.agenciatributaria.es/sta...iones/Modelos_200_al_299/210/mod210_mi_MI.pdf

If the property is in your joint names you need to complete one form each.


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## CapnBilly (Jun 7, 2011)

Just for your information, even though I could have submitted the return myself, as Beachcomber suggests, because its not difficult, I did get an accountant to submit it for me, for technical reasons. They charged me €40 plus iva for a joint return.

I would worry if someone who working on my behalf, still thinks its wealth tax, and not non resident tax.


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## Beachcomber (May 10, 2009)

I would worry as well! I have seen instances where the non-resident income tax has been calculated at 25% even though it has been 24% since 2007, where 2% of the valor catastral of a property revised since 1994 was used instead of 1,1% and where individual declarations for a couple were both calculated at the full amount each instead of half each all resulting in the payment of a tax far higher than it should have been.


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## BigD (Jan 29, 2011)

Beachcomber can I ask how you calculated this figure so I can check my own? Thanks.


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## BigD (Jan 29, 2011)

I think I've got it; value x .11% x 2 (wife and I) +20% iva?


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## Beachcomber (May 10, 2009)

Valor catastral x 1,1% x 24%. That is the total payable on the property. Divide this by 2 to get the figure for each of you individually. 1,1% is the figure to apply to the valor catastral to obtain the base figure and 24% is the rate of tax payable. VAT doesn't come into the calculation.


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## callaopam (Dec 20, 2011)

*Tax Question?*

This is definately non residents income tax. Many owners who have not paid this are getting letters from the hacienda asking them to register to pay voluntarily for 2008, 2009 and 2010. The hacienda is using the register of property owners to catch people who are not paying the tax. The statute of limitations is 4 years, but they can still collect the interest even if they cannot collect the principlal.
The calculation is about right at roughly €150 if the estimate of teh valor cadastral is correct ( I would have said this was nearer the €30K mark ). If your property has been revalued since 1994, ,the percentage is 1.1%, otherwise its 2%. But if you rent your property you are also allowed 3% of the valor cadastral each year as depreciation, and all bills ( IBI, basura, electricity,water, insurance etc), to offset against your rental income. 
Please be aware that from the year 2011, non residents are required to pay their tax quarterly
MY gestor charges me €30 to file the paperwork, so anything more than this is a rip off, change your gestor!!!!


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## CapnBilly (Jun 7, 2011)

I believe that the quarterly returns for non-residents only apply if you have actual rental, not imputed income


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## Beachcomber (May 10, 2009)

Non-resident notional income tax is payable in one hit by 31st December of the year following that for which it is being paid. Therefore, declarations for 2010 have to be paid by 31st December 2011 unless it it relates to more than one property in which case it must be paid by 30th June and a separate declaration made for each property.

If, for example, you have an apartment with a parking space and a storeroom with different catastral references you have to complete a separate declaration for each.


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## callaopam (Dec 20, 2011)

Beachcomber said:


> Non-resident notional income tax is payable in one hit by 31st December of the year following that for which it is being paid. Therefore, declarations for 2010 have to be paid by 31st December 2011 unless it it relates to more than one property in which case it must be paid by 30th June and a separate declaration made for each property.
> 
> If, for example, you have an apartment with a parking space and a storeroom with different catastral references you have to complete a separate declaration for each.


I agree on the seperate filings - I have 2 properties. The new rules on quarterly returns apply from 2011, but if you are unaware of this, perhaps it only applies to Tenerife?


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## Beachcomber (May 10, 2009)

This is covered in Article 5 of the Orden EHA3316/2010 of the 17th December:

http://www.boe.es/boe/dias/2010/12/23/pdfs/BOE-A-2010-19707.pdf

paragraph b) of which states that the period for presentation of imputed income tax will be the natural year following the date upon which it becomes due which is the 31st December each year. It then goes on to give the periods for other types of non-resident income tax.

I don't know anything about the Canary Islands but this is a national law and I would have thought it unlikely that imputed non-resident tax would have to be declared on a three monthly basis. However, I stand open to correction.


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## Beachcomber (May 10, 2009)

I have been checking this with a contact at the AEAT office in Málaga who confirms the period of presentation and declaration of non-resident imputed tax as I have stated, ie. during the year following the date upon which it becomes due on the 31st December each year and she is not aware of any separate arrangements for the Canary Islands.

I assume that you submit imputed tax returns pro rate to the number of days on which your property is not rented out which are not subject of your returns for actual rental. Have you been paying this on a three monthly basis the same as the tax for your actual rental income?

My contact also confirmed that they are currently tying up property ownership via the various property registries and tax records held by regional governments with a view to identifying non-residents who are not paying the imputed tax. The first stage is an invitation to pay these taxes for the past four years (she was unable to confirm whether, or not, there would be fines and surcharges) with the next stage being enforcement with the embargo of bank accounts and/or properties if necessary.


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## BigD (Jan 29, 2011)

Just wanted to say thanks, your calculations and advice were spot on Beachcomber. It's turns out our advisers were charging us €60 each to process a €9 liability! We will be sorting it out ourselves. Happy New Year to everyone.


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## Beachcomber (May 10, 2009)

If you are going to do it yourself remember that you must do so prior to 31st December. If you are going to buy forms from the tax office don't be tempted to stock up for subsequent years as the whole process is changing on the 1st January and the preprinted paper forms will no longer be accepted.


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## Beachcomber (May 10, 2009)

callaopam said:


> ...Many owners who have not paid this are getting letters from the hacienda asking them to register to pay voluntarily for 2008, 2009 and 2010. The hacienda is using the register of property owners to catch people who are not paying the tax. ...


I know that there are those who do not like to be reminded of such things (someone even accused me of winding people up) but here are examples of the letters mentioned in callaopam's post above:


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## xabiaxica (Jun 23, 2009)

I have copied this to the Expat Tax forum - I think it is also relevant there


the new thread can be found here http://www.expatforum.com/expats/expat-tax/100013-tax-question-spain-3.html#post692626


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