What yearly taxes must I pay? Why should I pay income tax?

What yearly taxes must I pay?

First of all you need to pay your local property taxes: Impuestos sobre Bienes Inmeubles (IBI), rubbish collection and sewage rights. These taxes are to be paid by all property owners, residents and non-residents alike. It is set and collected by SUMA in name of the town hall, similar to council tax in the UK. Once you have registered at SUMA all these local property taxes are generally paid by direct debit.

Why must I pay income tax in Spain?

Spanish tax law requires that non-resident owners of property in Spain have to pay Spanish income tax even if they have no Spanish earnings such as rental income. This non-resident tax issue can be confusing. Why should owning a holiday home entail paying income tax?

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Rental Spain

What if I want to rent out my Spanish property?

If you possess a property within the Valencian Community -the provincies Alicante, Valencia or Castellón- and you want to rent out your property, then you are obliged to register this property.

Rental Spain – how to register your property?

In order to register your Spanish property for rental, you need to fill in a form called Declaración Responsable which you can download http://www.gva.es/downloads/publicados/IN/25082_BI.pdf

You need to specify the category of your property, choosing between (S) (Superior), (P) (Primera=First) or (E) (Estándar=Standard)

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Inheritance Tax Spain 2015. New rates and reclaims.

Inheritance Tax Spain 2015. New rates and reclaims.

There is a lot of contradictory information regarding the calculation of the Inheritance Tax. There was a national law applicable to non-residents and a different law with a regional character that applied to those who were residents in each of the regions with legislative autonomy. Nowadays the regional law is applicable to both residents and non-residents.

The risk of paying high rates

But is there a real risk of ending up paying very high rates? Do not be alarmed. Before the 1st January 2015 most of the Spanish residents that inherited from other residents paid little or nothing given the existence of reductions in the taxable figure. Now all those reductions, bonuses and exemptions are fully applicable to non-residents.

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