Deemed income tax for individuals not resident in spain

If you are a non-resident in Spain and you own an urban property located in this country, you will be subject to non-resident deemed income tax.

Non-Resident Income Tax (IRNR) is regulated by THE Spanish Law 5/2004 of 5 March and the Spanish Law 1776/2004 of 30 July.

The income to be declared is the amount resulting from applying the following percentages to the cadastral value of the property, which appears on the Real Estate Tax receipt:

In general, 2%, the individual or the company, in inheritances, communities of property and also entities with no legal personality, that constitute an economic unit or a separate patrimony subject to taxation. Then the taxpayer would be who acquires the land or in whose favour the real right in question is constituted or transferred.
For example, in inheritances, the taxpayer is the heir.

The case of real estate whose cadastral value has been revised, or modified by the council and has entered into force in the tax period or within the period of the ten previous tax periods, 1,1%.

This income is understood to have accrued once a year, on 31 December. The proportional part of this amount shall be declared if the property has not been owned for the whole year or if it has been rented for some period of time.

For example, if you purchased the property on October 31, 2019, you will only have to pay tax on the deemed income tax (IRNR) return for 2019. Only for the days you owned it until December 31, 2019, i.e. it is calculated from date to date.

The applicable deemed income tax rate depends on your residence

If you are a resident of the European Union, Iceland or Norway, the current tax rate is 19%. And for all other taxpayers the rate is currently 24%.

The submit period is for the whole calendar year following the date of accrual. For example, if you are non-resident in Spain and have owned a property in Spain during 2019, you must file your deemed income tax (IRNR) for 2019 before 31 December 2020.

Do not hesitate to contact our Law Firm in Marbella if you have any questions regarding to the Andalusian transfer Tax and stamp duty or at the time of buying a property.  Our team of expert Lawyers in Marbella will be happy to advise you and carry out all the relevant procedures of the purchase.