Lawyer Raymundo Larraín gives us a gentle reminder on the annual tax obligation that all non-resident property owners must comply with.
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Article copyrighted © 2021. Plagiarism will be criminally prosecuted.
By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
21st of October 2021
Like every year, we take the opportunity to gently remind all non-resident property owners in Spain they are under a fiscal obligation to file once a year a tax that is known as non-resident imputed income tax (NRIIT, for short). This is regardless of whether you rent out, or not, your Spanish property.
You are taxed on the previous year. So, in 2021 you are taxed on year 2020.
Basically, this tax is a legal fiction whereby the Spanish Tax Office surmises that you derive some form of financial benefit (income) from your Spanish home. That is why it is called non-resident imputed income tax, as it is notional income. Spanish Tax Authorities take the view an owner derives a benefit-in-kind from owning property, irrespective of whether it is true or not, and taxes it accordingly.
The bottom line is that if you are non-resident, and you own property in Spain, you need to file this tax once a year. If you don’t, you will eventually be landed with a nasty tax summons by Spain’s estate agency that may lead to placing a charge against your property for the unpaid tax.
The property value taken for tax purposes is the book value in possession of the tax office.
Deadline to file it: 31st of December of every year.
Please do not wait until the last day to file this tax. We strongly advise you to file it as soon as possible. We file this tax online all over Spain for a very competitive fee, it doesn’t matter where your property is located.
More information on our Fiscal Representation Service here: Non-Resident Imputed Income Tax
Advantages of appointing a Fiscal Representative in Spain
- Larraín Nesbitt Abogados has 18 years’ experience filing expat taxes at your service.
- Deal only with native English-speaking lawyers & economists.
- Professional Indemnity Insurance which you can claim from in case of negligence or malpractice. Currently, this cover stands at €1,000,000 with Larraín Nesbitt Abogados.
- Registered professionals. Larraín Nesbitt Lawyers only employs qualified and registered Abogados and Economists. Registered abogados are subject to disciplinary action by the Law Society so must conduct themselves honourably to continue practising or else risk being barred.
- We are members of the British Chamber of Commerce, Spain.
- Complete the tax forms in Spanish.
- Ensure you do not overpay on calculating the tax due on your property based on its rateable value and the number of days you have owned it on a pro-rata basis.
- Submit the tax returns before the Spanish Tax Office in a timely manner (thus avoiding attracting penalties and surcharges on late payment).
- Setting a fiscal representative’s address to deal with all tax-related correspondence generated throughout a fiscal year.
- Reply to any tax notifications within the deadline ensuring tax compliance.
- Appeal misunderstandings or material errors (additional fees may apply).
- Up-to-date knowledge of fast-paced fiscal changes.
Larraín Nesbitt Abogados, small on fees, BIG on service.
Taxation services available from LNA
- Non-Resident Imputed Income Tax, NRIIT (Fiscal Representation Service)
- Holiday Rental Accounting Service (HRAS)
- Probate & Succession
- Non-Domiciled Tax Scheme
- Wealth Tax
- Spanish Resident Income Tax (IRPF)
- Wealth Planning
Related tax articles
- Spanish Wealth Tax (Patrimonio) – 8th November 2011
- Taxes on Selling Spanish Property – 8th December 2014
- Changes to Spain’s Inheritance and Gift Tax Law – 21st February 2015
- La Complementaria or ‘Bargain-Hunter Tax’ – 8th May 2015
- Taxes on Buying Spanish Property – 8th July 2015
- Non-Resident Taxes in Spain – 8th December 2015
- Spanish Inheritance Tax for Non-Residents (Part I) – 21st February 2016
- Spanish Inheritance Tax for Non-Residents (Part II) – 8th March 2016
- Non-Resident Income Tax – 8th December 2017
- Tax advantages on becoming resident in Spain – 8th March 2018
- Non-Resident Imputed Income Tax (Fiscal Representation Service) – 8th October 2018
- Taxes on Buying Spanish Property – 8th December 2018
- Capital gains tax mitigation on selling (or gifting) property in Spain – 8th May 2019
- Tax form 720 – Modelo 720 – 21st of February 2020
- Spanish Income & Wealth tax reminder – 8th June 2021
Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. No delusional separatist politician was harmed on writing this article. VOV.
2.021 © Raymundo Larraín Nesbitt. All Rights Reserved.