A lot of foreign non resident buyers/sellers are not aware of this tax form modelo 210 and simply don’t pay it.
The Spanish tax system is one where YOU need to declare things yourself, you can’t wait until you receive a tax bill from the government (Spain is different 😉)
So let’s imagine you (European citizen) own a property in Spain as a non-resident and you do not rent it out. How much is this tax and how can you calculate it?
First you need to take your IBI bill (Municipal Property tax). On this bill you will find a figure called “Valor Catastral”. Attention! Not the “Valor Catastral Suelo” which is the value of the plot.
There is a difference between EU citizens with 19% tax, and non-EU owners (British nationals living outside of the EU, Iceland and Norway) who pay the higher tax rate of 24%.
To see how much income tax equates to, let’s now use the example of a property with a cadastral value of €100,000 x 1.1% is €1,100. You will therefore pay tax on €1,100 per year. An EU resident will pay a tax rate of 19% of the calculated €1,100. This equates to €209 per year, in comparison to a non-EU resident which will pay 24%. This equates to €264 per year.
More than 50% of foreign property owners are not aware of this tax. That’s one of the reasons that when a non-resident sells their property, the buyer has to retain and pay 3% of the sales price to Spanish tax authorities. This is a provision for taxes due; this is not a tax.
But we will explain all this in another info editorial of Sol Albir Academy.
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