Spain operates a system of self assessment for the collection of taxes. Both residents and non-residents with property in Spain are under an obligation to file tax returns there.

An individual is considered to be non-resident if he does not remain on Spanish territory for more than 183 days in the calendar year and if the principal centre or base of his economic interests lies outside Spain.

In order to help meet the yearly requirement of filing returns it is advisable to appoint a Fiscal Representative in Spain.

The representative is required to acquire the forms, complete them, and pay the taxes due, all within a required period of time.

Where the only asset in Spain is a property it is not compulsory to appoint a Fiscal Representative. However, despite this, failure to use a Fiscal Representative can have several consequences:

(i) All communications from the tax office will be sent to your Spanish address and any delay in receiving that correspondence could have adverse effects.

(ii) Spanish tax forms are complicated and there may be an additional language problem if you are not fluent in the Spanish language.

(iii) Legislation and practice in Spain changes frequently and failure to file returns correctly could incur fines.

However, if you owns more that 1 property (i.e. a garage is a second property) is COMPULSORY to appoint a Fiscal Representative. If you miss this formality, the penalty is € 2000 and the Tax Office can execute the penalty against the property. 

Briefly, the taxes payable annually to Hacienda in relation to property are as follows:

1) Wealth Tax (Impuestos Patrimoniales)

This is calculated on the value of the property, which in turn is held to be the greater value of the “Valor Catastral”, the acquisition price or the value decided previously by Hacienda for other taxes, such as property transfer tax, together with any other assets owned, such as bank accounts, etc.

2) Income Tax (Impuestos sobre Renta)

A non-resident with a property in Spain in his or her own name is obliged to declare 2% of the Valor Catastral as notional income. Tax at a basic rate of 25% is payable on that income.

Appointment of The Fiscal Representative

For the individual owner, appointment of a Fiscal Representative is relatively straightforward, requiring the completion of a written Authority nominating the Fiscal Representative and payment of the required fee.

However, should the Fiscal Representative need to appeal against the level of any taxes assessed, then a Power of Attorney will be required, the cost of which will be at the client’s expense.

For the corporate owner, more documentation will be required, namely a Power of Attorney and an official translation of the Memorandum and Articles of Association.

  Non-Trading Private Individuals

1. To apply for and obtain a fiscal number (N.I.E. No.), where required, € 70 plus VAT per person. If you have not yet acquired a fiscal number, please note that acquisition of a fiscal number is mandatory.

2. To acting as Fiscal Representative including preparation and completion in Income and Wealth Tax Returns: annual fee of €170 plus VAT. (Regular price in the Market: € 350 plus VAT)

Important Note: The fee for preparation and completion of Tax Returns and the Fiscal Representation depends upon the work and time involved and the figure given is based upon a non-trading private individual owning one residential property.

3. Where a local Tax Office require a formal Power of Attorney in favour of the Fiscal Representative, this will need to be provided by you at your own expense.

  UK Non-Trading Property Holding Company

1. To apply for and obtain a fiscal number, where required. €350 plus VAT. Provision of a Power of Attorney and official translation of the Memorandum and Articles of Association will be at the expense of the company.

2. To appoint the Fiscal Representative including registration with Hacienda - €225 plus VAT.

Provision of a Power of Attorney and official translation of the Memorandum and Articles of Association will be at the expense of the company (unless provided under item 1 above)

3. Preparation and completion of Income Tax and Wealth Tax returns €500 plus VAT approximately.

The fee for preparation and completion of Tax Returns depends upon the work and time involved and the estimate given is based upon a non-trading private company owning one residential property.