OUR EXPERTISES > PRIVATE CLIENTS & FAMILIES
Spanish Tax Residency
Tax Residence in Spain
Our Expert in Spanish Tax Residency
Spanish Tax Residency Rules
Under Spanish law, you are most likely to be classed as a tax resident in Spain if the following apply:
- You spend more than 183 days in a calendar year in Spanish territory
- Your centre of financial interests is located in Spain
- Your spouse and/or underage children reside in Spain
Becoming a Spanish Resident
To legally become a permanent Spanish resident, you need to secure three things:
- Residencia, or Spanish residency card – an official document that registers you as living in Spain, issued at the Foreigner’s Office or a police station. To secure one, you must have all the necessary paperwork, which varies from region to region, and be able to demonstrate that your life in Spain is financially sustainable.
- Padrón – a three-monthly certificate registered at the local town hall that enables you to apply for a SIP (health card) and other local benefits. You should renew your padrón at least every five years to ensure that your name is kept on the register.
- SIP (health card) – the exact requirements for this will depend on your age and the region you wish to live.
As a Spanish resident, you will be liable for taxes, including:
Capital Gains Tax
You will need to pay capital gains tax on any properties, investments or other assets located in Spain. The tax rate is applied on a sliding scale based on the amount of profit made, from 19% to 30%.
Wealth Tax
Wealth tax is measured on the assets you own worldwide rather than your income and includes property, savings, investments, art, jewellery, furniture, cars and boats, etc.
The Spanish wealth tax will only affect you if you have assets in Spain worth over €700,000 per person. The rate you pay will depend on the area in which your assets are located and can range from between 0.2% to 3.5%.
Residents in Spain can also get an additional allowance of up to €300,000, which can be offset against the value of their primary home (not including properties owned through corporate structures – see our pages on Buying Spanish property through a company).
Spanish income tax and non-residence rules must be considered carefully when buying property or investing in Spain.
Spanish Non-Resident Tax
If you are classed as a non-resident for tax in Spain there are a number of taxes that you may be liable to pay including:
- B.I (Impuesto Sobre Bienes Inmuebles) Tax – similar to the UK council tax, this annual payment to the local town hall or SUMA office is based on the rateable value of the property, also known as the Valor Cadastral. The tax rate depends on the region but ranges between 0.4 and 1.1% of the Cadastral rateable value.
- NRIIT – Non-Resident Imputed Income Tax, a form of ‘benefit in kind’ annual tax collected at the end of each year, even if you do not rent out your property. If you sell your property, the Spanish authorities will review your record to ensure that NRIIT payments are up to date. If not, the tax office will take the outstanding amount from the 3% that is withheld by the buyer and paid into the tax office on completion of the sale of the property.
- NRIT – Non-Resident Income Tax is applicable if your property is rented out on either a long or short-term let. It is due quarterly even if the property is not being rented out during that period.
- Non-Resident Wealth Tax is chargeable on your assets and investments located in Spain even if you are non-resident.
- Capital Gains Tax – you must pay capital gains tax for any properties, investments or other assets in Spain. The current rate of capital gains tax is 19% for non-residents from EU/EEA countries or 24% for non-residents from other countries, including the UK.
- Inheritance Tax – this must be considered if you own property in Spain.
The figures above are indicative of the tax payable during a Spanish property purchase. The actual costs will depend on your particular circumstances and the region in which you want to purchase, so please contact us for an accurate estimate.
Spanish Non-Resident Tax Calculator
There are free Spanish Non-Resident Tax Calculators online, but please be wary about relying on them to calculate the tax you think you need to pay. There are many complex variables regarding your tax residency status, the type of income you receive, the type of property you own, etc., so the results from these calculators can be inaccurate. The fact that you used an online calculator will not help you if Spanish tax officials issue you a fine for an inaccurate tax declaration.
For peace of mind and to avoid any nasty surprises, it is always worth getting professional advice on your Spanish residency status and the taxes due. Tax and legal professionals may also be able to suggest tax mitigation steps that can help you legitimately reduce your tax bill.
Why choose Del Canto Chambers?
Del Canto Chambers provides dual-qualified, multi-lingual tax lawyers, who have worked on over 500 cases throughout Europe, the Middle East, Latin America and Asia, making us the counsel of choice for London-based and international clients, corporations, solicitors and tax advisers.
Testimonials
Del Canto Chambers has a 5/5-stars client satisfaction on Google Review
Satisfied clients are among our highest priorities. See what other clients has to say about us on Google Review:
Related services
Articles & News
At Del Canto Chambers we are always sharing our knowledge and act as an active voice across different media. The following articles and news are related to and relevant for Real Estate Sale & Purchase and Spanish Tax Law.
Decisions by the UK against illegal workers and it’s implications for businesses
Decisions by the UK against illegal workers and it’s implications for businesses. Recent talk within the legal and political realm has been centred around the
Galicia: An understated region in the north of Spain
Galicia: An understated region in the north of Spain. In an age where true exclusivity is defined by authenticity and space, Galicia remains one of
New ETA and Rising Fees: Your Guide to UK Travel and Immigration Changes
Your Guide to UK Travel and Immigration Changes. It is no secret that immigration regulations are always complex and understanding them, as well as keeping
