As the owner of a second residence in Spain, there are a number of taxes to consider. In itself, the amount of these taxes is not too bad, but the costs quickly add up if you forget to pay. This article explains more about forgetting Spanish taxes.
First, an overview of the most common taxes
Do you own a second residence in Spain and do not rent it out? If so, you will generally face three taxes.
- The IBI: this is an annual municipal tax which can be domiciled through your bank account. Whoever owns the property on 1 January is the debtor of this tax. Collection takes place in the period August-October. No declaration is required. In the province of Alicante, the IBI is known as the SUMA.
- The basura: this is basically a fee for waste collection. In some regions, you can pay the basura through the water bill.
- National non-resident tax: this tax is based on the valor catastral or cadastral value of your property. The taxable base depends on the municipality. If the valor catastral has not been revised in the past 10 years, the taxable base is 2% of the cadastral value. Otherwise, it is 1.1%. The rate is 19% for EU residents. The difference with the two previous taxes is that you itself must file an annual return by 31 December.
What if you have not filed a tax return?
First, there is negligence interest on the tax due. Today, this is 3.75% per year. In addition, the tax liability is increased by a penalty. If you are more than 12 months late, the penalty is 20% of the amount due. Incidentally, on this penalty, you also pay negligence interest. So the cost of a late tax return can add up quickly.
How many years can the Spanish tax authorities go back?
The Spanish tax authorities can go back up to 4 years. So you only need to file returns for the past 4 years.
Note: one declaration is per person. So if two people own one property, it is two declarations per year.
What about Belgium?
In Belgium, since 2021, you are required to assign a cadastral income (KI) to your foreign property. Based on the current value, you can calculate the foreign KI and declare it for personal income tax purposes.
Normally, you cannot forget the IBI and basura. After all, these taxes are paid automatically every year. So forgetting Spanish taxes is more likely to occur with the non-resident tax. In itself, this tax is not that high, but its cost can quickly add up.
Do you have questions about your late Spanish tax return? We are at your disposal.