If you own a second home in Spain which you don’t rent out or earn any income from, you’ll still need to file a tax return for the year 2019 before December 31st. Or face possible repercussions from the Spanish tax authorities.
Estimates suggest that around 600,000 Brits own a property in Spain. And whilst some live there full-time and are fully integrated into the Spanish tax system a large proportion of owners are non-resident for tax purposes, spending less than 183 days a year in Spain. Which means that they are liable to pay tax on their property – even if they do not rent it out.
Modelo 210 Non-Letting Tax – Non-Resident Liablity
The Modelo 210 tax regime was created by the Spanish authorities to cover non-resident earnings from property rentals and sales. Overseas investors who let out their apartment or villa to tourists are expected to submit quarterly returns, whilst capital gains made from property sales are also covered by the Modelo 210.
But confusion still arises over a third category of owner – non-residents who don’t let their property out at all.
After all, why should you be liable to pay tax if you are not actually making any money out of your second home in Spain?
Your Property’s Catastral Value
The answer lies in the fact that the Spanish tax authorities still deem this to be a form of imputed income, i.e the property could always be rented out in the future. And as a result, an annual tax of between 1% and 2% of your property’s catastral value is levied – which must be paid each year, retrospectively, before the deadline of December 31st.
You can find your property’s catastral value on the IBI/rates bill that will be sent to you each year by the council that governs the region where your property is located. And fortunately, this amount is much less than your property’s resale or purchase value.
If you haven’t got round to paying your Modelo 210 tax yet then there’s still plenty of time to take action. Some owners are still paying inflated fees to lawyers or accountants (which often amount to more than the tax bill itself). Whilst others still try to wrestle their way through the process on the Spanish tax authority website.
However, our service saves you time, money and all of the hassle of interacting with the Spanish tax authorities. Just complete our Modelo 210 tax form and we than handle the whole process for you. Calculating the tax owed, filling out the tax forms and filing them with the Spanish tax authorities on your behalf. Before providing you with an official receipt for your records.
Don’t delay too long though, as December 31st is now on the horizon. If you have any questions or queries about the Modelo 210 tax and your liability visit our FAQ’s page for more information.