If you are not a resident of Spain you have to pay two types of taxes each year:
• Local Taxes (Council Tax, IBI) These taxes are paid directly to your City Council or through the offices of SUMA.
• Government Taxes (Income Tax) These taxes are paid to the Tax Agency (Tax Authority).
Then you must pay the income tax on your vacation home.
In Spain, if you have a property, it is automatically considered as a type of income and all owners named in the Deed of Title must submit an annual return for each property that you own.
Most owners are still not aware of this. It is important to understand that this is an income tax on your property and is separate from, and in addition to, the local tax / IBI / SUMA (which is an annual payment of real bricks and mortar).
It is not related to income in terms of salary or pensions, but only with property.
As an individual, you are not required to keep records that include a general balance. Your minimum obligation is to keep records of all your sales and business expenses; So that it complies with the required standards.
Of course, although you are not required to maintain a balance, you can benefit from it, as it will help you manage your business more effectively.
• Government Taxes (rental income tax) An income tax return must be filed with the Tax Office for any income received for rent.
When you live in Spain for more than 183 days in a calendar year, you are legally responsible for being taxed as Spain’s Resident Income Tax. The 183 days do not have to be consecutive.
1. The Spanish government needs to collect more income via taxes.
2. They are getting close to the many non-resident owners who do not file the mandatory annual tax return and residents who must pay taxes in Spain on their worldwide income and do not do so.
3. The Tax Authority has been linked to the Land Registry system and now knows who owns each property.
4. Utilities are now required to provide data to help identify which homes are continuously occupied by residents or tenants.
• Late declaration and payment will incur a fine.
• Ignorance of the law or system is not accepted as a reason for delay or non-payment.
• Bank and property accounts can now be garnished until the back taxes and fines are settled in full.
Only if you do nothing and mistakenly believe the myth that you are still somehow “under the radar” or that all your tax affairs are “resolved in my country”
VAT, registrations in the Tax Office, Taxes on Economic Activities, withholdings, informative annual tax returns, payment of taxes in installments, income tax on natural persons.
