X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Overseas Investing

    Tax system in Spain for rental property?

    Hi,

    Sadly for some of us and even for the country itself, Spain is a tax hell. This is a link to the official Spanish tax agency's (Hacienda) web page on the subject (English version):

    https://www.agenciatributaria.es/AEAT.in...icas.shtml

    My point of view:

    1. You will pay 19% for as long as the UK is a member of the EU. After Brexit it will depend on the deal or not deal situation I guess

    2. For non EU residents it goes up to 24%

    3. Another important difference is that non EU residents pay tax on gross rental income (not deductible expenses at all) while EU residents can deduct certain expenses directly linked to the property

    4. On top of that you will have to pay the equivalent to the council tax which in Spain is paid by the property owner regardless of who lives in the property. It is usually much cheaper than in the UK but another expense on your shoulders nevertheless

    5. In your UK tax return you will have to include the property (there is a section for this) and both the income from the property and taxes already paid in Spain. I believe the difference goes with the rest of your UK income and you will have to pay depending on your tax rate band.

    6. Interestingly, I think you are allowed to include some of the expenses directly related to the property in your UK tax return (same rules as if the property was in the UK). You will have to double check that with a UK accountant.

    7. You do not need an state-of-the-art accountant/advisor who costs an eye but you should look for legal advice. I would ask your wife's friends/relatives to recommend an accountant for the Spanish side and your regular accountant for the UK side. This is usually enough for most people. In any case...

    8. … although all the above is based on my experience (Spaniard living in London and renting out properties in Spain), it is not legal advice by any means.

    Rules for holiday properties are complicated and, as eurosteve0034 said, can change depending on the region, local council or even your neighbours (specially if the property is a flat in a block of flats).

    I hope that helps.

    Best,

    David

    0
    0

    Hi David,

    Thanks a lot for the detailed reply,  very useful!

    Yes it may be worth looking for a Spanish accountant!
    0
    0