If you own a second home in Spain, but don’t live there all year round then you’ll be considered a non-resident for tax purposes
If you’re not a resident in Spain, but do have a financial asset such as property, even though you don’t live there, you will be obliged to pay some taxes. These generally include IRNR or non-residents tax, IBI property tax and rubbish tax.
Typically, you will be a considered a non-resident for tax purposes if you spend under 183 days a year in Spain, but there are exceptions so you should contact a tax expert if you’re unsure. For example, you could also be obliged to pay non-residents tax if you have a long-term contract for a rental property here.
IRNR stands for Impuesto sobre la Renta de no Residentes and essentially includes most non-residents taxes. This can be property rental income tax, inheritance tax, wealth tax and capital gains tax.
Typically, you will be charged IRNR rate of 19% on net income you receive in Spain if you’re an EU resident and 24% if you’re a non-EU resident. So this would be either 19 or 24% on the rental income you receive from renting out your property. Remember if you don’t rent your property out and receive rental income you will still be charged this tax because of the possibility that you could rent it out.
There are other non-residents rates, depending on the type of tax you owe. This is 19% for capital gains, interest and dividends, 24% for royalties and between 8% and 40% for pensions. Many countries have double taxation agreements with Spain though, which means you won’t pay tax on these twice.
IBI stands for Impuesto sobre Bienes Inmuebles in Spanish, which means tax on property goods. Sometimes it’s also referred to as SUMA depending on where you are in the country.
It’s a tax paid by anyone who owns a property in Spain, regardless of whether you’re a resident or a non-resident. It’s like a type of council tax. Even if you rent your property out, you as the landlord will still be responsible for paying this every year. It’s important to be aware that the IBI amount changes depending on where your property is located.
Rubbish tax or la tasa de basuras is a new type of tax for homeowners that has recently been introduced. Local governments have until April 8th 2025 at the latest to enforce it, but some councils have already started charging it.
Others are charging part of it only so far, while some say the fees are already covered by other pre-existing municipal taxes. You should find out from your local town hall as to what the plans are in your area and what you will be charged.
Whether it’s you as a property owner who is responsible for paying this tax or if it’s your tenants who pay it, again will depend on where the property is located.
If you are looking to buy a property in Spain or Portugal and need a mortgage, email mark@vci-network.com for the latest criteria