If you buy or inherit a property in Spain there are ongoing obligations that you need to meet to ensure that you continue to comply with Spanish law.
As with owning property anywhere else, it makes sense to insure your property and contents.
Council Tax (Impuesto Sobre Bienes Inmuebles)
This is normally paid annually in one lump sum between 15th September and 15th November. The amount will depend on the location, size and age of the property.
Non payment of IBI can lead to legal proceedings being taken against you and an embargo on the property.
You will be responsible for the utility charges – electricity, gas, water sewerage, rubbish collection etc. from the time that you buy the property and should make arrangements for these to be put into your name.
Community Charges (Cuota Comunidad de Propietarios)
You should pay these otherwise the property can be confiscated and auctioned in order to settle the debt.
If you are non-resident you must declare any income you have earned in Spain. This applies even if you receive this income by renting out to people from your home country and the money never touches Spain.
Even if you do not receive any rent from the property it is assumed that you have received some sort of benefit and you are taxed on this (but only at 0.5% of the Valor Catastral).
You will also normally have to declare this income in the country where you are tax resident but can normally offset the tax paid in Spain through Double Taxation Treaties.
Spanish tax residence
The taxes that you pay when you buy a property in Spain will normally depend on whether you are tax resident there or not.
Tax residence is a determined by a number of factors;
- How long you spend in that country? Is it 183 days or more a year (not necessarily continuously). If so you are likely to be tax resident there.
- Is your main home there? If it is then you are likely to be tax resident there.
- Is your immediate family (spouse and dependent children) based there? If so you are likely to be tax resident there.
- Is your main economic interest there? If so you are likely to be tax resident there.
- If you do become tax resident in a country then you will normally stop paying taxes in your home country and start to pay taxes in the new country.
- Do not be tempted to have selective amnesia when it comes to declaring taxes as the authorities in both Spain and the UK are clamping down on people who do not do not do things properly.
- Sometimes you should declare something for tax purposes in one country and also in another. Spain and the UK have a Double Taxation Treaty which means that you don’t normally pay tax twice and can offset the tax paid in the other country against the tax that you would otherwise pay in your home country.
For more information, please take a look at our guide to Spanish tax residence.
Need help with owning property in Spain?
Our UK-based team of property lawyers are highly experienced in helping clients who have bought or inherited property in Spain, including dealing with ongoing costs and legal issues involved in Spanish property ownership.
With a thorough understanding of both UK and Spanish law, we can provide clear, reliable legal guidance in plain English, giving you the confidence to deal effectively with any property you own in Spain.