Property maintenance in Spain

Main article: Real estate in Spain

Municipality: IBI and garbage collection tax

The municipality of the city issues the following invoices to the owner of the property with a strict frequency:

• IBI Real Estate Tax. Real estate tax per year is 0.5-2% of the cadastral value of housing, which is about 10-15 times less than the market and is levied once a year. These funds are sent to the city treasury and are used to improve the city. The exact amount of tax depends on the cadastral value of real estate and on the region of Spain.

• garbage collection tax (about 50 euros per year, depending on the city).

Luxury Tax (Impuesto de Patrimonio)

He is popularly called the luxury tax. The basis of this tax is rather complex, it takes into account all Spanish assets and liabilities of an individual. But in the absence of other assets, mortgages, husband/wife,... - the base will be the purchase price.

This tax has a progressive scale, which for non-residents starts from 700,000 euros. I.e. if you bought an apartment/house for 650,000, then this tax will be zero.

If you bought a house for several million, then the amount of this tax can be quite significant. However, as usual, where there are taxes, there are options for optimizing them.

The amount of 'luxury tax' must also be calculated by you INDEPENDENTLY (and better by your accountant) and you must file a return (Form 714) in the tax by June 30 of each year (starting from the next purchase).

Non-Resident Income Tax (IRNR)

Non-resident income tax (IRNR - Impuesto sobre la Renta de No Residentes).

If you do not rent an apartment

All non-residents with real estate in Spain annually pay something like income tax. And do not pay attention to the word "income" in the title - it is not about actual, but about potential income (a potential opportunity to rent out).

The base of this tax is also the cadastral value. The current cadastral value is indicated in the IBI tax receipt or it can be requested through the personal account of the Ayuntamiento website at the location of the real estate or the personal account of the Cadastre by electronic certificate (EDS).

The IRNR declaration is filed by the owner for each real estate that is owned by him. That is, for example, if you own an apartment and a garage in Spain as two independent real estate objects, you must submit two declarations: one - for an apartment, the second - for a garage. You cannot combine all real estate objects that are owned in one declaration.

When calculating it for 2020, there may be 2 options (depending on how long the cadastral value has changed):

Cadastral value * 24% * 1.1% i.e. 0.264% of cadastral value

or

Cadastral value * 24% * 2.0% i.e. 0.48% of the cadastral value.

Usually, if the cadastral value was updated less than 10 years ago, then the coefficient will be 1.1%, and if more than 10 years ago, then 2.0%. The dates of the last update can be specified in Ayuntament of the corresponding city^[1].

Here is an example of calculating IRNR tax for 2015 for a Russian citizen - a non-resident of Spain, who owns an apartment with a cadastral value of 100,000 euros (the cadastral value was revised after 01.01.1994).

For real estate in Spain, whose cadastral value has been revised since 01 January 1994, a ratio of 1.1 per cent is applied. For other real estate - 2%.

In 2015, the IRNR tax rate for non-residents - citizens of the Russian Federation - 24%.

IRNR tax for 2015 is calculated according to the following formula:

Cadastral value 100,000 x 1.1% = 1100

1100 x 24% = EUR 264.

It is important that unlike real estate tax, this tax does NOT come to your post office. You SAMI or your accountant must calculate it and file a return (Form 210) in tax by December 31 of each year (starting from the next purchase).

As practice shows, very many Russians do not know this. And when they find out, it often turns out that the deadlines have long passed and it is necessary not only to pay all the debts, but also to pay a fine (up to 50% of the tax amount).

There were cases when the owner, a non-resident, did not pay this tax for 5-6 years, and then under some circumstances (for example, when receiving GNZ in Spain, when selling real estate, this tax suddenly "surfaced" and surprised). Therefore, if you have not paid IRNR for several years, being the owner of real estate in Spain, you will still sooner or later have to pay it for all the years with fines and penalties.

In this regard, there are two most acceptable options:

The first option: you can wait for Requerimiento or the so-called "letter of happiness" from the Spanish tax and submit returns in order of requirement. In this case, it is IMPORTANT that you do not skip this email and pay the tax within the prescribed period - 10 working days from the moment of receipt of the email. Letter - Requerimiento is considered received, even if you were not personally handed it into your hands, but simply left in your mailbox. In case of non-payment on time, serious problems are possible up to the seizure of bank accounts and real estate^[2].

The second option is voluntary payment of IRNR tax, i.e. before obtaining Requerimiento. You can voluntarily file and pay for the IRNR declaration without waiting for Requerimiento, but fines and penalties will be minimal. Here the principle is: the sooner you file an overdue declaration and pay IRNR tax, the less the fine and penalty.

In any case, after voluntary payment of tax in violation of the deadline, you will receive a letter - PROPUESTA DE LIQUIDACION DE RECARGO POR PRESENTACIÓN FUERA DE PLAZO DE PAY TAX to which you will be offered a fine for late payment of the tax.

The penalty for voluntary payment of IRNR tax (payment before receipt of Requerimiento) with violation of the filing period of no more than 12 months is 15% of the tax amount and reduces its amount by 25% with voluntary repayment within the prescribed period.

The penalty for voluntary payment of IRNR tax (payment before receipt of Requerimiento) with violation of the filing period of more than 12 months is 20% of the tax amount and reduces its amount by 25% with voluntary repayment within the prescribed period.

If you have received a PROPUESTA DE LIQUIDACION DE RECARGO POR PRESIDACIÓN FUERA DE PLAZO DE AUTOLIQUIDACIÓN letter, which you may not agree with the accrued penalty and application form for 15 days, you may appeal with respect to the application form. MODELO PARA EFECTUAR ALEGACIONES EN EL PROCEEDINGS DE LIQUIDACIÓN DE RECARGOS with your identification and case number.

If you agree with this penalty charge and penalties, you may not send anything to the tax office and wait for the receipt that comes with the letter LIQUIDACIÓN DE RECARGO POR PRESENTACIÓN FUERA DE PLAZO DE AUTOLIÓN You can pay this receipt by barcode at a branch or at an ATM of any Spanish bank or online through your personal account.

If you rent an apartment

If you rent out your property, then the IRNR tax is calculated quarterly and according to a completely different formula.

If you own real estate in Spain and you rent it out, the IRNR tax is calculated on the basis of rental income. A non-resident owner of real estate in Spain, leasing his real estate, is obliged to file an IRNR declaration every trimester. The deadline for filing a declaration and payment of IRNR tax is until the 20th of April, July, October and January for each trimester.

Example:

Here is an example of calculating the IRNR tax for 2015 for a Russian citizen - a non-resident of Spain, who owns an apartment, and he rented this apartment from January 01 to December 31, 2015 for 1000 euros per month.

In 2015, the IRNR tax rate for non-residents - citizens of the Russian Federation - 24%. IRNR tax for 2015 is calculated according to the following formula:

For each trimester of 2015, he needs to file an IRNR declaration and pay tax based on:

1000 EUR x 3 = 3000 EUR.

3000 x 24% = 720 EUR.

Utility payments

Utility payments are also mandatory. Their amount is determined by the partnership of owners and depends on the number of owners, the size and quality of communal property, the presence or absence of a pool, tennis court, etc. Utility costs for the maintenance of real estate are also mandatory if the owner of the real estate does not live in it most of the time.

Residents of apartments with a collective zone (common stairwell, basement, courtyard) will have to pay 300-500 euros per year for utilities.

In addition, the owner of the property pays the supplier companies a subscription fee for electricity, telephone and Internet, as well as the costs of these items, according to individual bills (0.09 euros kW/hour - electricity, 0.5-0.8 euros per cubic meter of water). Depending on the companies chosen and the level of consumption, these costs can average 100-150 euros per family of three people per month.

Payment for water and electricity is made by meter. The subscription fee for the water service is approximately 15 euros, electricity - 15.84 euros per quarter; these payments are made even if no one lives in the house.

For the phone and Internet will have to pay about 39 euros per month. A satellite antenna with all Russian channels costs about 120 euros per year.

Transfer funds from a Russian card to a Spanish card to pay utility costs

If you cannot top up your Spanish bank account with cash, you can use cashless transfers from a Russian card to a card issued with a Spanish bank.

In June 2018, Absolut Bank launched a service for cross-border p2p-transfers from cards of Russian issuers to cards issued by banks of other countries (CIS and Europe) in Absolut.

Such transfers became available to Mastercard Worldwide or Visa Inc. When you pay a customer, you only need to enter card details.

Maintenance of apartments on the coast

According to 2016, annually the owners of vacation properties on the coast of Spain spend 1,791 euros on its maintenance. This conclusion was reached by the authors of a report compiled by the Organization of Consumers and Users (OCU). They also noted that servicing public areas is the most significant item of expenditure: from 200 to 1,140 euros per year^[3].

When compiling the study, OCU experts considered the cost of maintaining 18 real estate objects with an area of ​ ​ 77 square meters located on the Spanish coasts. On average, owners spend 634 euros on public expenses.

In addition, they pay for utilities, even if most of the year the apartments are empty. So, on average, 76 euros are spent on gas, 216 euros on water, and 292 euros per year on electricity. The last expense item is the second largest, so experts advise revising the contract with the supplier and reducing the maximum allowable capacity in order to reduce costs.

In addition, the owners of vacation real estate give a significant part of the funds to the treasury. This category includes property tax (on average 276 euros per year), as well as garbage collection tax (117 euros). In addition, they pay income tax, the amount of which is 2% of the cadastral value of the object, or 1.1% if a revision was made in 2015 or during the previous ten years. So, for an apartment in Benidorm with a cadastral value of 75,000 euros, its owner pays 1,500 euros per year.

Owners may also face unforeseen expenses, including breakdown of household appliances or malfunctions directly in the apartment or public areas. Insurance costs an average of 180 euros per year. Its cost can be reduced if the contract is made with the same company as the main place of residence.

All the above expenses can be compensated through rent. However, it should be borne in mind that in many regions of Spain new standards have entered into force governing the process of delivery of vacation housing - for example, the requirement for its declaration in the Tourism Council.

Get Nota Simple yourself

To get visas for you and your relatives after buying real estate in Spain, you will need to receive Nota Simple - an extract from the real estate register.

Nota Simple yourself (instruction)

See also

• Real estate in Spain
• Real estate prices in Spain

Notes