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Paying your taxes in Spain

Personal Taxes in Spain

  • Personal Income Tax (IRPF): National & for residents only
  • Non-resident's Income Tax (IRNR): National, for non-residents only
  • Inheritance and Gift Tax: Regional
  • VAT Tax (IVA): National
  • Transfer Tax and Stamp Duty (Impuesto de transmisiones patrimoniales y actos jurídicos documentados): Regional
  • Property Tax (IBI): Local
  • Plusvalía: Local (paid when you sell a property)
  • Municipal Tax (Basura): Local
  • Motor Vehicle Tax (Impuesto sobre vehículos de motor): Local

Property Taxes in Spain (if you are an owner)

  • Residents: Personal income tax (including capital gains tax) and property tax (IBI)
  • Non-residents: Personal income tax (including capital gains tax), property tax and an additional non-resident property tax (personal income tax for non-residents only represents income from the property).

Capital gains on the sale of a property are taxable income that must appear on your income tax form for both residents and non-residents. This income is charged when the capital gain takes place. The gain is generally the difference between the purchase and sale values.

Withholding tax: If the seller is non-resident, then the buyer must withhold 3% of the agreed price (regardless of whether the buyer is resident or not). The buyer then provides the non-resident seller with a copy of the form so that the seller may deduct this retention from the tax payable in the capital gain. If the amount withheld exceeds the tax to be paid, the excess is refundable. If the tax withheld is not paid, the liability for the tax is attached to the property.

Non-residents must file a tax form by December 31 of each year if they own property in Spain, regardless of the value of the property. The tax is calculated based on the highest of the following three values:

  • The catastral value
  • The value assessed by the Spanish Tax Office
  • The purchase price.

The calculation of Inheritance Tax depends on:

  • The relationship of the heirs to the deceased.
  • Whether or not the deceased was a resident of the EU.
  • The value of the assets and also the region in which the taxes are to be applied.
  • These taxes are based on a scale acording to the points mentioned above.

Taxes for Corporate Property Owners in Spain

  • Corporate tax rate is variable. All expenses for the property are deductible, including utilities, renovation work, management fees, and property taxes.
  • There are bookkeeping obligations involved in maintaining an SL (Limited Company).
  • Shareholders and directors of the SL may be residents or non-residents.
  • If any future litigation is directed at the individual, liability cannot involve the property because it is the SL that owns the property, not the individual.
  • The capital gains do not necessarily have to leave the company to be taxed at 30%. They can be left as "reserves" for the company. There is a five year period in which to pay taxes on that capital gain or to re-invest in another business or property).

For more detailed advice on taxes ...

Don't hesitate to contact us ...

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