Do you have to pay taxes in Spain for a house that you only use a few months a year? And if you rent it, even for a few weeks, what are your obligations? Let’s take a look at the Form 210 for taxes in Spain for non-residents.
The Non-Resident Income Tax (IRNR) is a tax levied on the income received – or collected – in Spanish territory by persons not resident in Spain. It is compulsory to declare this tax by means of Form 210 of the Spanish Tax Agency (AEAT).
Main reasons to declare in Spain
- Having obtained income from works carried out in Spain, after a short stay, without being a tax resident. “This is the case, for example, with conference speakers, artists or sportspeople who do not live in Spain, – explains François Blin, partner of Bové & Montero –, but who must file Form 210 because they have earned income and have to pay the IRNR.
- Then there is the case of all income, presumed or real, linked to real estate geographically located in Spain, which we will deal with in detail.
- Finally, when selling a property located in Spain.
Example of a Frenchman buying a house in Spain
If we take the example of a French resident in France who buys a house in Spain to enjoy it during the summer months: Do you have to pay taxes in Spain throughout the year? “Yes, you do – says François Blin -, since it is an imputed income from real estate. Therefore, if you did not rent your property at any time in the previous year, you must complete Form 210. The tax is calculated by taking 1.1% of the cadastral value of the property, on which you will pay 19%.”
IRNR to be paid: It does not matter if you have used your house or not
It should be noted that it does not matter whether or not you have used your house. For example, during the pandemic, many non-residents were unable to travel and ‘enjoy’ their second home, but still had to declare and pay for the IRNR.
What are the deadlines for the filing?
As regards the deadlines, imputed income must be declared in the following year. In other words, the deadline for filing Form 210 runs from 1 January to 31 December of the year following the year in which the property is enjoyed. Indeed, until the end of the year, it is not possible to know how many days you have used your property, as it may have been sold before 31 December or rented, in which case the taxation is different.
The Spanish Tax Agency has sent a considerable number of letters to the owners of apartments rented ‘with black money’
What if I have rented my house?
If you rent your house, even if it is only for one month, you will have to fill in Form 210, “but then – François Blin points out – you can deduct the costs arising from the rent provided you are resident in a European Economic Area country. On the other hand, if you live in the United States for professional reasons, for example, you will not be able to deduct any expenses”.
The Form 210 must be completed annually or quarterly, as applicable
List of deductible expenses
Among the expenses that can be deducted are: “IBI” (Real Estate Tax); other taxes such as the one applied on garbage collection, if not passed on to the tenant; the condominium fees; the cost of certain fixed expenses (for example, if you rent the property with Internet included, this expense will be deductible); agency fees; in some cases, interest paid on the loan; depreciation of the property up to 3% of the cadastral value or of the acquisition cost, including commissions; and the comprehensive insurance. Note that it may be interesting to include an anti-squatting or coverage of eviction costs clause, something that many insurance companies have added to their policies.
Remember that these expenses can only be deducted at 100% when the property is rented 365 days a year, otherwise the number of days rented will have to be prorated for most expenses.
It may be interesting to include an anti-squatting or coverage of eviction costs clause
Finally, the 60% reduction foreseen in the IRPF (Spanish Personal Income Tax for Spanish residents) for rental income is currently not applicable to non-residents. However, this clearly discriminatory rule has been brought before the Court of Justice of the European Union, which has not yet ruled on the matter.
Rented house: What is the deadline for the filing?
In the case of income derived from the rental of real estate, the declaration is made quarterly, within the first 20 calendar days of January, April, July and October. Each of them includes the cumulative income of the previous quarter. This 3-month period shall also be maintained in the case of the sale of real estate.
IRNR: Attention to those who still do not declare in Spain
Beware of those who knowingly or unknowingly fail to declare this rental income earned in Spain. In fact, the Spanish tax authorities have four years and more and more means to uncover this type of information. In Spain, there were still 1.28 million undeclared rents registered, representing 40.8% of the total, which is why the AEAT has launched a tax inspection campaign since 2016.
Moreover, for the 2021 fiscal year, the Spanish tax authorities have sent a considerable number of letters to the owners of rented apartments ‘with black money’. It has increased from 21,000 tax inspections in 2016 to more than 713,000 this year. Therefore, be careful, since hiding information from the Spanish tax authorities constitutes fraud and may have consequences by way of tax inspections and penalties.
VIA https://lepetitjournal.com/madrid/logement/maison-espagne-quels-impots-francais-non-residents-337564
