Non-resident taxes in Andalucia

The Spanish tax system operates through self-assessment. Both residents and non-residents with property in Spain are under an obligation to file tax returns. Individuals become officially resident in Spain for tax purposes if they live more than 183 days in the calendar year on Spanish territory or if the principal centre or base of his economic interests are in Spain. A presumption of residence arises if an individual´s family lives in Spain.

Residents are taxed on world-wide income and non-residents are taxed on their gross Spanish source income and on capital gains arising for assets located in Spain. However, non-residents may also be taxed on deemed income in certain cases.

The most important taxes in Spain for non-residents who own a property in Spain are as follows:

Non-residents in Spain are required to declare income earned in Spain at a general rate of 24% and a 19% - 21% on Capital Gains of assets located in Spain.

A non-resident that has a property in Spain may have the following circumstances:

If the property is used by the owner or not rented, then the law establishes that there is a presumed yield of 1.1% or 2% (depending if the catastral value has been or not modified and updated from January 1994) of the catastral value, and if the property does not have a catastral value yet, then a 1.1% is applicable to 50% of the acquisition value of the house, over which 24% is payable on an annual basis. The filing period is the calendar year (1st of January till 31st of December).

If the property is rented then 24% is applicable on the income, deducting expenditures directly related to income for renting. The period for filing the tax form is at the time demanded by the lessor or on the date that the rent is collected.

When the property is disposed of in future, the non-resident is liable to pay 19%-21% as Capital Gains Tax. The taxable gain is reduced by a percentage that varies depending on the period that the asset is held (this reduction is only applicable for properties purchased before 31st December 1994). The period for filing the tax form is within four months from the completion date Furthermore, when a non-resident disposes of Spanish real estate, 3% must be withheld by the purchaser from the sales price and he pays this amount to the Tax Authorities. This tax withheld is on account of the final tax liability (Capital Gains) of the seller from the sale.

This tax has been eliminated since the 2008 fiscal year.

IBI is a local tax levied annually on the ownership of rural or urban real estate properties. The tax is based on assessed property values known as the catastral value (valor catastral) which normally is 50% of the market value.