Annual taxes Spain

Up to 2008 all property owners in Spain were liable for two separate taxes every year, income tax and wealth tax. The good news is that the Wealth tax has been suppressed this year and therefore from 2009 on, both residents and non residents just have to pay income tax. In effect, any non-resident individual with a property in his/her name is subject to an Income Tax of 24% of 2 percent (or 1.1% if the cadastral value has been revised after 1994) of the valor catastral, the official rated value of their property.
The deadline for this tax is the 31st December of each year. It is important to be up to date in the payment of this tax since if you do not pay this tax (plus wealth tax up to 2.008), the tax authorities may check it when you sell your property and deduct from the excess of the capital gains tax retained in the sale, the amount you should have paid plus interests plus a fine.

SPANISH WILLS

Legally it is not absolutely necessary to make a Spanish will to dispose of your assets in Spain but if you want to avoid time consuming and expensive legal fees for your heirs you should make a Spanish will disposing of your Spanish assets. In effect, if you have a foreign will, that will is valid in Spain but so the will is declared effective to dispose of your Spanish assets a number of steps must take place before:

  • a certified copy of your will must be legalized by a notary
  • this certified copy must be also legalized by the entity in charge of the Hague Apostille in your country
  • The will have to be translated into Spanish by a registered/official translator.
  • Your heirs may have to get a certificate of law affirming that you had the legal capacity to make a will, that the will is valid, that the law of your country permits free disposal of your estate, that the will has been duly proved and that the trustees named have the correct legal powers to administer the estate.

It is a complicated, time-consuming and expensive process that may take months and would not allow your heirs to sell the property if they needed to do it. If you do not even have a will in your country it is strongly advisable to make either a Spanish will or a foreign will since this process is then much more complicated and may take even one year.

This information was supplied by
Nuria Bergillos
Abogado (Col. 6757 ICAMA)
of
CN ABOGADOS
Pº Jesus Santos Rein nº2
Edificio Ofisol 3º A
Fuengirola
Tlf: (+ 34) 951 702 651
Fax: (+34) 952 479 040

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2 Responses to “Annual taxes Spain”

  1. Lionel says:

    About the “Annual taxes Spain”, Who gets to decide what the value of the property is? If a house is advertised for say 200,000 but I buy it for say 130,000, what would my taxes be? would it be 24% of 2% of 200,000 OR 24% of 2% of 130,000 OR 1.1% of 200,000 or 1.1% of 200,000. SOunds like a recipe for corruption to me. What would the taxes be if I was Legal?

  2. Andrew says:

    Hi Lionel,
    what the property is on sale for or what you bought for has has no relevance in regards to this tax. It comes down to the value given by the relevant governmnet bodies.
    What yo uwould need to know is what the valor Cadastral is.

    hope this helps
    Andrew

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