Spain is one of the most popular countries among foreigners for the purchase of real estate. Warm climate, mediterranean sea, picturesque nature and hospitable people. What else is needed for happiness?
This trend also applies to those who live outside Spain for most of the year, renting out their property, and use it as a “summer house” for several months. In this post, we will touch on these types of citizens.
Individuals and legal entities staying in Spain for less than 183 days are considered non-residents. In other words, they are not taxpayers in Spain, which is certainly attractive.
Despite this, non-residents also have their own taxation system in Spain. If a non-resident owner makes a profit from renting out real estate, he is obliged to report to the Treasury by paying IRNR tax (Impuesto sobre la Renta de No Residentes) .
This is the non-resident income tax on real estate in Spain. Its peculiarity is that the owner is fully responsible for its filing and payment. Nobody will send a notification in advance, let alone write off from the account.
The non-resident owner is required to complete and submit Modelo # 210 for each property.
Declaration No. 210 is submitted quarterly, that is, from 1 to 20 of April, July, October and January for each previous trimester.
If you are an EU tax resident, the tax rate will be 19% with the possibility of writing off costs such as utilities, garbage collection, bank interest on mortgages, depreciation of buildings and furniture, etc.
All other non-residents are taxed at a rate of 24% of gross income, that is, without the possibility of reducing the taxable base at the expense of expenses incurred.
If the real estate is commercial and you rent it to a legal entity or through a legal entity, then in this case you still need to pay VAT (IVA) .
IVA – Impuesto al valor añadido – is a payment for the consumption of goods and services, which is deducted from consumers – individuals, and companies act as tax collectors. It does this by adding the VAT percentage to the base price.
In the case of renting out real estate, taxpayers are subject to a general rate of 21% in addition to IRNR tax .
For filing, you must provide Modelo 303 regardless of the result of the declaration (receipt, deduction, refund or zero balance).
Form No. 210 is submitted quarterly from 1 to 20 April, July, October and January for each previous trimester.
It declares the incoming and accrued VAT on sales invoices.
!!! By the way, renting real estate by day through placement on sites such as Airbnb, Booking, Homeaway, etc. is also subject to VAT. By law, such additional services as change of bed linen and towels, left-luggage office, meals, laundry services, cleaning are classified as hotel services. Therefore, non-residents are also charged 10% VAT on the cost of living.
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