Ongoing property taxes payable in Spain
Spanish Rental Income Tax – a recent ruling by the European Court of Justice forced
Spain to change how non-residents were taxed on rental income which came into effect
on the 1st of January 2010. Prior to 2010, non-residents were taxed at 24% on their
gross income without any allowable deductions. The new ruling allows EU residents
to deduct allowable expenses when calculating taxable income.
The new system requires a quarterly income tax return to be submitted by the 20th
day the month following each calendar quarter e.g. April 20th, July 20th, October
20th and January 20th. An annual balancing return is no longer required.
Under Spanish legislation a tax is levied on unoccupied or lifestyle properties.
Deemed Rental Income is charged at 24% - calculated at either 1.1% or 2% of the
property’s rateable value. The Spanish deemed rental income tax return must be filed
by the 31st December each year.