Income tax

[hoopy]

We are owners but non-residents. Last week we received a letter from the Spanish tax authorities looking for "income tax" for 2009 of 222 euros. I asked advise of Natalia at Tony De La Cruz and she explained to me that even though we don't rent out our flat we are still due to pay it.

Can anybody shed any light on exactly what this is for?

[lollipop]

You used to pay a wealth tax, now they call it income tax. It is assumed that because you own a property here you get benefit from it, e.g the sun!!. All non resident owners should pay it. It is calculated on the cadastral value of your property and is something like 2% of 24%. These may not be the latest figures and maybe someone that has paid recently could help. As I am now resident our tax is different. If you have two names on the deeds you pay half each.

[whaleywanderer]

...... just a note, the cadastral value can be found on your most recent rates bill.

[pollensa]

hoopy, there are quite a few threads on this in this section (see http://www.forum.puertopollensa.com/...-spain-uk.html). Basically all non-resident property owners (& of course residents!) need to complete a tax return every year. For non-residents there are 2 relevant taxes - wealth tax (patrimonio) & income tax. The wealth tax went for a short while & then returned at a much higher level so many no longer need to pay. If you rent your property out then income tax on the rent (less expenses) is liable but even if you don't, you pay a set sum based on the 'cadastral' value of your property.

Each year you are due the tax for the previous year so if you are only paying 2009 now, I'm afraid that you also owe the following years. I think that we pay Sep/Oct each year for the previous year.

Some of us use our solicitors to submit & pay the tax each year & others do it themselves or via an on-line service.

When we first bought our property, I bought a copy of the excellent book on Law in Spain - see Books on Living & Working in Mallorca - the 2013 version is available & on Kindle.

[illeslex]

Good morning,

As our Law Firm, ILLESLEX, has seen some questions regarding the INCOME TAX FOR NON-RESIDENTS, we would like to shed light on the mentioned matter.

The non-resident individual owner of a property must file an annual return for this tax, accruing on December 31st.

The income to be declared will depend on the destination to be given to the property:


1º.- Attributed income from urban real estate for own use.

If the property is for own use, the yield to be declared is the amount that results from applying the assessed value of the property by 2% (in general) or 1.1% (revised for properties with rateable value from January 1st 1994).

This performance is subject to a 24.75% and the deadline for settlement will be throughout the whole calendar year following the date of accrual, until December 31st.

Example: A natural person with residence in Germany is owner of a real estate located on the Balearic Islands destined to private use. The revised rateable value of the property is 140.000€.

140.000€ * 1’1% = 1540.-€
Amount = 1.540€ * 24’75% = 381,15.-€


2º.- Yield of leased properties.

If the property is leased, the yield to declare is the full amount received from the tenant, without deducting any expenses. These yields are considered to be accrued at the time of being payable by the landlord or at the date of payment (if earlier).

On them a 24.75% is paid.

In the case of taxpayers being resident in another State of the European Union, you may deduct the costs provided under the Law of Income Tax for Individuals (if it is duly justified). For instance:

- The interests of foreign capital invested in the acquisition or improvement of the property.

- Those caused by the lease of the property.

- The amount of premiums on insurance contracts of the property.

- The amounts for services and supplies.


3º.- Yield of properties by mixed use.

It should be taxed in proportion to the period the property is intended to rent and own use, to be governed by the rules described above.

Example: A Non-Resident leases the property during the first 6 months (182 days) of the year for 1.200.-€/month and the rest of the year (183 days) the property is destined for own use. The revised cadastral value is 140.000.-€.

Rental
Amount= full obtained yield * leased months * 24,75%
Amount= 1.200.-€ * 6 months * 24,75% = 1.782.-€

Own use
Amount = prorated cadastral value *1,1% * 24.75%
Amount = (140.000.-€ /365 days * 183 days private use) * 1,1% * 24,75%
Amount= 70.191,78.-€ * 1.1% * 24.75% = 191,09.- €

The deadline for settlement depends on the result:

If the result is a payment: During the first twenty days of the months of April, July, October and January regarding the income obtained in the previous calendar quarter.

If the result is a quote zero: From 1st to 20th of January of the year, following to the accrual of income.

If the result is a return: As of February, 1st of the year, following to the accrual of income.


Should you have any question, ILLESLEX is completely at your disposal.

Kindest regards,