Declaration for Tax as a RESIDENT of SPAIN - Page 3

You will pay Non-Residents' Tax in Spain. This is not a large tax. Your solicitor probably set it up for you.

From memory, the tax is direct-debited in September each year. Probably worth checking your bank to be sure you are paying.

Hi 765,

Did you buy through an independent lawyer (abogado), or with one appointed by the selling agent?  Either way, they should have told you about Non-resident tax and, as Kelvin has advised, they may be handling this for you, but they will be charging you for it - not just the tax itself, but their fee for doing it.  If you bought in 2017, I would expect you to be aware of it, because either they'd be invoicing you, or you'd see a direct debit going out of your bank account.

Non-resident tax (IRNR, i.e. 'Impuesto sobre la Renta de no Residentes') is payable a year in arrears, so depending on when you bought your property in 2017, you should have paid a pro-rata amount that year, based on the length of time you owed it (the Spanish tax year runs from 1 January to 31 December), and you should have paid the full amount for subsequent tax years.  So the tax due for 2017 would have been due for payment no later than end December 2018.

The good news is that the tax due each year is typically hundreds, rather than thousands, of Euros.  The tax is based on the catastral value ("valor catastral/base liquidable") of your property - you can find the catastral value on your Council Tax ("IBI") bill - often mistakenly called "Suma", because that's the agency in the Alicante region that collects it.  If your IBI is collected by Suma, you will receive a bill from them around August each year and it's usually payable by the first week of September (it was delayed to November last year, because of Covid-19).

If your property has been valued within the last 10 years of the date you bought it, the Spanish Tax Office (Agencia Tributaria) determine your Non-resident tax based on 1.1% of the Catastral value.  However, if there has been no revaluation in that period, the tax can be determined by your Town Hall (Ayuntamiento), so it's the date of the last revaluation on your IBI bill that determines which percentage should be used, i.e. 1.1% (Agencia Tributaria) or 2% (Ayuntamiento).

The tax rate used for UK nationals (as EU citizens) for the tax years 2019 and 2020 was 19%.  For the tax year 2021, the tax rate for a UK national. as a non-resident Third Country National,  will increase to 24%.

So, let's assume the catastral value of your property is Eu 100,000 and it hasn't had a catastral revaluation for the last 10 years: your Town Hall valuation calculated at 2% of Eu 100,000 = Eu 2,000.

For 2017 that Eu 2,000 is taxed at 19%, pro-rated for the length of time you owned it that year, i.e. if you owned the property for only 200 days in a 365-days year, then the tax due is Eu 380 x 200 (days), divided by 365 (days) = Eu 208.22 tax payable.  Assuming there has been no catastral revaluation for years 2018, 2019 and 2020, the calculations would also be based on 2% of the catastral valuation x 19%.  

However, because UK non-residents are taxed as Third Country Nationals from 1 January 2021, your Non-resident tax for this year (payable by end December 2022) will increase to 2% of the catastral valuation x 24%, i.e using the example above, that would be  Eu 2,000 taxed at 24% = Eu 480 (365 days).

As Kelvin has suggested, if you're unsure whether you've been paying your Non-resident tax, you should speak to the lawyer who acted for you in your purchase as soon as possible.  If they have done nothing in this respect, you would probably be better engaging an "asesoria" to do this for you (it's a specialist skill and they're likely to be cheaper than a lawyer).  If necessary, ask for recommendations on this forum.

Kind regards,

Kim

well, you are mostly right in all your comments. just a few things. 

1. To determine fiscal residency related with worldwide taxation of your income and property, effective stay and residence over 184 days in a fiscal year is important. Padron, Registration Certificate as Resident, etc are related with administrative residence or right to enter and stay in Spain. 

2. Due to some DTA you should be considered fiscal resident only in one state, on a general basis. 

3. If you can obtain a Certificate of Fiscal Residency in your home country, as you get a state pension or other links, you can be considered in Spain as non-fiscal resident, and it will not be questioned generally by Spain Tax Authorities. 

Many things from common practice or everyone does it are not to be taken for certain, so I suggest that considering your particular case you talk to someone who can guide you and advise you. 

Always ready to help with my expertise and knowledge if requested. 

Brgds, 

Juan GALIANA

[email protected] 

Hi,

MODELO 720 AND  DOCUMENT OF FISCAL RESIDENCE

Yes indeed modelo 720 should NOT be forgotten.
Question

HOW did you do de process of completing this modelo 720.

Our tax consultant requests 200 euro excluding vat for doing it for us.

She also asks 150 euri ex vat to go to Elche to apply there for us for a proof of fiscal residence in order to get restitution from my country of birth.

She says that especiale in the first year it can take long time before the tax office sends this document by regular correos...

Also by going to Elche Tax office she can answer questions the officer would ask.

Does anybody know of a cheaper and effective way. In other words is this doable by ourselves, or others.

Ronald

Hi Ronald,

We use Abaco Advisers (offices in Alicante and Torrevieja) for our tax affairs.  When we did our Modelo 720 in 2017, they charged €90 per person.  

Your advisor seems expensive, but I wonder whether Covid-19 is making these procedures much harder and so more expensive.  Perhaps you should contact another couple of advisers for a quotation, to see how their fees compare.

Kind regards, 

Kim

Hi Kim, Thanks for your reply. We were also thinking that we were paying a corona premium.

Before we lived in Thailand. There they have a kind of similar version of the law of ask and demand, they just double the prices when demand is less 50 percent less...

Kind Regards,

Ronald

Dear Ronald,

I have just been investigating Gestors whom assist in filing the Modelo 720 on behalf of EX-Pats residing in Spain. Prices have ranged from an exorbitant   €250- + IVA per person all the way down €50- inc. IVA per person.

The later fee has been quoted and charged already after myself contracting a Company named "CSB Consulting" in Torrevieja Phone: 966 70 16 93 

Before going ahead with CSB Consulting, I checked out the company reviews on the Internet and they were ALL very good.

I was originally referred to them by an acquaintance whom as lived in Spain for 20+ years and has used them for his tax affairs whilst working here self employed. So I thought that was a good enough referral. 

There is no immediate rush to file the Modelo 720, as you have until 31st March 2021- All the best