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how much is non residency tax?

how much is non residency tax?

Postby daz » Fri Dec 16, 2016 11:53 am

hi, I'm on the verge of buying a property in Quesada, and now i've just heard of 'non residency tax'. so now I concerned this is yet another bill to pay annually to add to the rest. but does anyone know much about this, I intend to remain a UK citizen and just be in Spain for holiday times, is that the criteria for it?.

would it be a fixed amount? or dependent on how much time we spend in Spain? is it individual? or per property? maybe even affected by the size of property?

so far, I am aware of electricity bills, community charges, council tax, and now non residency tax. are there any other mandatory costs to owning a property in Spain?

any advice appreciated, thanks.
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Re: how much is non residency tax?

Postby marcliff » Fri Dec 16, 2016 12:45 pm

Non-residency tax, or imputed income tax, is based on the price (actually the rateable or cadastral value) of the property and you are charged for the benefit deemed from owning the property. Each person owning the property will pay the tax and it will depend on the value. If you rent out your property, you don't pay it but you have to pay income tax on the rental income.
As said, it will depend on the value. We had a 2 bedroom flat as non-residents and the tax was €75 each per year. When we moved to a 3 bedroom property it was €90 each per year but that was about 7 years ago.
You will also pay water standing charges on a quarterly basis which, really, is not much difference as if you were using water or not and includes the rubbish collection fee. Our non water useage rate was around 50 euro a quarter but living here permanently it is only just over 60 euro a quarter.
You will also pay a non-resident certificate charge every two years. The bank does this for you and will charge anything from 20 to 35 euros every two years (each).
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Re: how much is non residency tax?

Postby stu and maz » Fri Dec 16, 2016 4:22 pm

We bought our 2 bed apartment 5 years ago. Me, my wife and my brother. We pay around €18 non-resident tax each per year. Our solicitors pay it for us and I haven't noticed that figure change much over those years.
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Re: how much is non residency tax?

Postby marcliff » Fri Dec 16, 2016 11:01 pm

stu and maz wrote:We bought our 2 bed apartment 5 years ago. Me, my wife and my brother. We pay around €18 non-resident tax each per year. Our solicitors pay it for us and I haven't noticed that figure change much over those years.



Are you sure that is your non-resident tax and not the charge for the non-resident certificate?
My maths isn't brilliant but I work that out that the cadastral value of your property if the non-resident tax is €18 a year at about €4,000. Your apartment would therefore be valued at somewhere around €10,000.
Non-resident tax is worked out at the rateable or cadastral value of your property multiplied by 2%. You then pay tax at around 24% on that.
So, a property valued at, say, 100,000 euro will have a cadastral value of about 40,000. The 2% multiplier makes it 800 and 24% tax for that is €192. A 2 bed apartment valued at 40,000 euro will have a cadastral value of about 25,000 euro or (with multiplier of 2%) or 500 and tax would be €120.
Therefore the €18 seems rather low.
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Re: how much is non residency tax?

Postby Ian2009 » Mon Jan 23, 2017 8:37 pm

Are those figures (192 or 120) paid by each person who is named on the deeds i.e doubled for two. If so - is it better to have the property in one name if it makes no difference to your inheritance / will planning?
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Re: how much is non residency tax?

Postby marcliff » Mon Jan 23, 2017 8:52 pm

The figures are per person. However, they have been reduced and the multiplier, if you property has been revalued since (can't remember the year but it is some time ago) is 1.1% and the tax rate has been reduced to 19%.
So, a cadastral value of €40,000 x 1.1% = 440 euro and 19% is €83.60.
If you only do it in your name, the person who inherits will be liable for tax on 100% value of the property. In two names only responsible for tax on 50% (there are tons of allowances for spouses and children plus an allowance which varies by region).
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Re: how much is non residency tax?

Postby Ian2009 » Mon Jan 23, 2017 9:30 pm

Thank you - so if we have a cadastral value of 32,000 - only built in 2005 - so not revalued 1994 (I think) - means 32,000 x 2% = 640 x 24% = 154 euros EACH - per year?
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Re: how much is non residency tax?

Postby marcliff » Mon Jan 23, 2017 9:40 pm

No, the tax has been reduced to 19% for 2016 and 2017 for those resident anywhere in the EU. And the year I was looking for was 1994.
Therefore, if your cadastral value is 32000 then times by 1.1% is 352 at 19% total equals 67 euro or thereabouts per person named on the ownership deeds per year.
I'm pretty sure that all properties in this area were revalued a couple of years ago (should be done every 10 years but I believe this was after 20 years when they got round to it).

Oh, if you suddenly get a bill for a million euros, I stand by my right of anonymity.
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Re: how much is non residency tax?

Postby Ian2009 » Mon Jan 23, 2017 9:42 pm

:text-goodpost: thank you again - lol
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Re: how much is non residency tax?

Postby marcliff » Tue Jan 24, 2017 1:04 pm

Trotter wrote:Isn't the total tax then divided by the number of owners? i.e. 33 euros.
......Each owner would have to fill out their own tax return but I'm sure they only pay a proportion of the total tax on the property.

"stu and maz wrote:
We bought our 2 bed apartment 5 years ago. Me, my wife and my brother. We pay around €18 non-resident tax each per year. Our solicitors pay it for us and I haven't noticed that figure change much over those years."........This would mean a total tax bill of 54 euros.



I don't think so as it's not a property tax, it's an imputed income tax based on the amount of benefit each person is deemed to have received from the property.
It's some years since we had to pay this but we both paid the amount equal to full non-residence tax which was 24% at the time.
The calculations the solicitors sent us certainly didn't split the bill in two at the end and they used the full cadastral value at the beginning to work out the tax (this was less than half the amount we paid for the property).
Looking at the instructions for completing the tax return, the only time 50% comes into it is if you do not know the cadastral value of the property. You then divide the total value of the property by 50% and work out the multiplier of 1.1% and then 19% of that value. You do not divide the cadastral (rateable) value of the property and, if using that, each owner must use the full cadastral value.
However, as said, it's a long time since we paid this tax and this is all coming from memory. Obviously best to get a solicitor or a gestor to work it out for you.
Also remember you do not pay this tax if you rent the property out but pay income tax on the rent received instead.
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