Carlos Baos – Non-Tax Residents

Spanish Non Resident Tax

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What taxes must be paid when owning a property in Spain?  Non-Tax Residents In Spain.  Legal advice by Spanish Solicitors in Marina Alta 

The convenience of becoming a tax resident, or not, in Spain, is a question not without complexity, due to its consequences at fiscal level, that we have approached in a multitude of occasions. In this week’s article we want to address this issue from a different perspective: What taxes must pay a non-tax resident in Spain that owns a property in our country?

Wealth tax. In the first place we find the wealth tax, which taxes the wealth of individuals. However, the first €700,000 are exempt from payment.

IBI and garbage. Probably the two taxes that our readers are most familiar with when owning a property in Spain. The first one taxes the mere ownership of a property. The second one is related to the tax collection services usually provided by the municipality.

Non-Resident Income Tax. This tax has different modalities, depending on whether the property is rented, at the disposal of its owner or has recently been sold.

  • If the property is not rented, this tax is payable once a year, and it is calculated based on the cadastral value of the property and a percentage that varies depending on the country of origin of the taxpayer. Being highly discriminatory for those outside the European Union, Iceland or Norway (19% vs. 24%).
  • If the property is rented, this tax is paid each quarter. As in the previous case, non-EU citizens are discriminated against since they will not be able to deduct certain expenses (repairs, homeowners fee, etc.)
  • Finally, when the property is sold, it will be time to declare the possible capital gain obtained. That is to say, the difference between the acquisition value and the transfer value. The difference between both is taxed at 19%, although in this case residents and non-residents can deduct certain expenses (lawyer fees, real estate agent fees, etc.)

3% withholding: a legal obligation of the buyer.

When the seller is a non-resident, the buyer is obliged by law to withhold 3% of the price and deposit it into the bank account of the tax office. This withholding is considered an advance on the capital gains tax of the seller. If there is no real gain, a refund can be requested. However, please be aware that if you are not up to date with your non-residents income tax previously discussed, the Spanish taxman could refuse the reimbursement of the 3% retention.

At White Baos Lawyers we are experts in conveyancing, renting, tax advice to expats, etc. If you have any doubt related to the tax obligations that you may have as non-resident owning a property in Spain, do not hesitate to contact us. We will offer you expert legal advice on these and other issues related to Real Estate Law.

You may be interested in the following services and articles:

Municipal Plusvalia Tax. Liability of the buyer if the vendor is non tax resident in Spain.

Foreigners in Spain: Giving a Spanish property to children or family.

Are you Non Tax Resident, selling a property in Spain? Know the taxes to be paid.

Carlos Baos (Lawyer)

White & Baos.

Tel: +34 966 426 185


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Written by

Carlos Baos (Lawyer)

Lawyer Carlos Baos has been advising on variety of expat-related legal issues for years and weekly column offers free weekly insights.