Wouldn’t be cheaper to rent for a week than …

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This topic contains 5 replies, has 3 voices, and was last updated by Profile photo of Anonymous Anonymous 11 years ago.

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  • #51420
    Profile photo of Anonymous
    Anonymous
    Participant

    …paying the imputed income tax?

    As a non-resident if your property is purely for your personnel use you have to pay an imputed income tax. This tax is based on 2% of cadastral value. For a 200 000 Euros property you would pay 200 000*0.02*0.25 = 1000 Euros.

    Now if you declare that you are renting, let say a week at 500 Euros.
    You would only have to pay 125 Euros (25% rental tax).

    I must be missing something?

    Thank you
    JS

  • #60170
    Profile photo of Anonymous
    Anonymous
    Participant

    You have to pay both taxes 🙁

  • #60171
    Profile photo of Anonymous
    Anonymous
    Participant

    Not according to:

    http://www.spanishpropertyinsight.com/spanish_property_taxes_for_non_residents.htm

    ” If you 1) do not reside in Spain 2) own property in Spain and 3) rent out your property, you have to pay income tax on the rent instead of the imputed tax described above. “

  • #60174
    Profile photo of Anonymous
    Anonymous
    Participant

    It might be cheaper to not buy and rent for a week. ❓

  • #60180
    Profile photo of Anonymous
    Anonymous
    Participant

    Dear Nips,

    Well spotted!

    About 3 years ago I asked the very same question to a fiscal advisor here in Spain. The answer was “…..err, I’ll have to get back to you on that one”. He didn’t, but as it’s not the most pressing issue I never chased it up.

    However I did once look it up in Blevins Franks’ excellent guide called ‘Living in Spain’.

    This being tax, the answer is so complicated it makes one despair.

    If you are non-resident and rent out your 2nd home for the whole year, then you only pay income tax on the rental income earned.

    However if you only rent out your 2nd home for part of the year, then you have to pay income tax on the rental income earned, plus an imputed income tax for the months the property was empty.

    So using your example you would pay 125 Euros for the week rented, plus 200,000 * 0.02*0.25*0.98=980 Euros, Total = 1,105 Euros.

    These figures may be slightly out, but you get the idea.

    Regards

    Mark

  • #60185
    Profile photo of Anonymous
    Anonymous
    Participant

    Thank you Mark.

    Make sense.
    There is no way they would have miss that one. 😥

    JS

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