Introduction to property tax in Spain
Property tax in Spain is a tax system that applies to the ownership of assets, including real estate. The Spanish government levies this type of tax on the value of the property and it is assessed and paid annually. In addition, a surcharge may apply in certain cases.
Property tax rates in Spain vary depending on the autonomous community where the property is located.
Who pays property tax in Spain?
Property tax in Spain is paid by the owner of the property. In most cases, the owner is the person registered as the legal owner of the property in the land register. In some cases, however, it may be the person using the property who has to pay the tax. This is generally the case when the property is used for commercial purposes.
If you are not a resident of Spain but own a holiday home in Spain, you must pay Non Resident Tax to the Spanish tax authorities for the 2021 tax year before the end of December.
Many people confuse the Non Resident Tax with the IBI(Property Tax) which is paid to the Spanish municipality. However, the Non-Resident Tax is an additional tax which is paid to the Spanish tax authorities – similar to the Danish Property Value Tax
Denmark does not have a double taxation agreement with Spain but you can deduct the Spanish property tax you pay from the property tax you pay in Denmark on your Spanish home
How is property tax calculated in Spain?
Property tax in Spain is based on the value of the property. The value is assessed by the government and calculated annually. In some cases, a surcharge may apply.
The tax rate depends on the autonomous community where the property is located.
You are only taxed on the part of the year you owned the home. This is important in relation to the tax you have to declare for the years you either bought or sold your Spanish property.
What are the consequences of not paying property tax in Spain?
If you do not pay property tax in Spain, you may be subject to fines and other penalties. In addition, the authorities can seize your property. It is therefore important that you make sure you pay your property tax on time each year.
It is therefore important that you, as a non-resident in Spain, remember to report your Non-Resident Tax on time.
In general, we recommend that whether you are a resident of Spain or of Denmark, have your tax calculated by experts who know the local law on taxes and income relations.