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

[AnonymousParticipant]

…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

[AnonymousParticipant]

You have to pay both taxes 🙁

[AnonymousParticipant]

Not according to:

https://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. “

❓

[AnonymousParticipant]

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

[AnonymousParticipant]

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

[AnonymousParticipant]

Thank you Mark.

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

JS

[Author]

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