Whether or not you are a Spanish resident, you have to pay property taxes in Spain every year.
For the most part, property taxes in Spain for Russians do not differ in rates, form or payment deadlines from the taxes paid by Spanish citizens and residents. Perhaps the only one that stands apart is non-resident income tax.
Which property taxes in Spain apply to Russians?
Property taxes in Spain include:
- Tax on real estate.
- Tax on motor vehicles.
- Wealth tax (applies only to Russians who are resident).
- Non-resident income tax.
Let us look at each of these taxes in more detail.
Property tax in Spain: real estate
Property taxes in Spain include the tax on real estate. In Spanish this annual tax is called Impuesto sobre Bienes Inmuebles (IBI). All property owners in Spain must pay the annual property tax, regardless of personal status and type of property: individuals and companies, Spanish citizens, residents and non-residents owning residential, agricultural or commercial property.
The tax is calculated on the cadastral value of the property. It is charged and paid once a year; the taxpayer is the person registered as the owner in the Registro de la Propiedad (land registry) as of 1 January of the current year.
The tax rate is set by each municipality within the minimum and maximum permitted rates (from 0.3% to 1.3%).
Property tax in Spain: motor vehicles
The full name of this property tax in Spain is Impuesto sobre vehículos de tracción mecánica (IVTM). As in the previous case, the tax is payable by all owners of vehicles registered in Spain. It is charged and paid once a year. The taxpayer is the owner of the vehicle as of 1 January of the tax year.
For cars the tax is calculated on engine power; for motorcycles, mopeds and motor-assisted bicycles on engine capacity; for buses on the number of seats; and for goods vehicles on the maximum permitted weight.
Property tax in Spain: wealth tax
Wealth tax (Impuesto sobre el Patrimonio, IP) is levied on the personal assets of Spanish citizens and Spanish tax residents whose value exceeds the current thresholds. It takes into account movable and immovable, tangible and intangible assets.
In 2020 Spain was almost the only European country that did not abolish this tax in response to the crisis caused by the coronavirus epidemic.
You will find more information on this topic in a separate article, “Wealth tax in Spain”.
Property tax in Spain: non-resident income
Non-resident income tax (Impuesto sobre la Renta de No Residentes, IRNR) is a property tax in Spain that applies both to actual income earned by non-residents in Spain (for example, interest on bank deposits or income from letting property) and to the deemed income from owning property.
All non-resident owners must pay this property tax in Spain: the obligation arises from the mere fact of owning property in Spain, and it does not matter whether the property is let or not, or whether it brings in income or not. If it does, additional tax obligations arise, but if there is no income, dealing with the tax agency is fairly simple: once a year you file a tax return online and pay the tax due.
The calculation is fairly simple:
- Take 2% of the cadastral value of the property (or 1.1% if the municipality’s last cadastral revaluation was carried out no more than 10 years ago);
- Take 24% of the result: this is the amount of tax you must declare and pay.
Consequences of not paying property taxes in Spain for Russians
Remember that if Russians do not pay property taxes in Spain on time, late-payment surcharges are added. Moreover, debts on non-resident income tax will prevent you from obtaining a residence permit: a future resident of the country must have a clean record with the tax authorities.
