Spanish Taxes

Hi, I am very new to spain as my father has just passed away and left us a lot of worry in the form of a villa in Monte Cid Alicante, I now know we have to pay IHT and lawyers fees which are very high and wipe out all his money he left us. But my biggest worry now is that we have to pay so many taxes and the spanish housing market like the uk is not good for selling.

Please could someone explain to me as a non resident what taxes I expect to pay until we sell the property, I understand the wealth tax has been abolished and we have to now pay rental tax even if we do not rent the property out,  if so what would be the tax in Monte Cid , if we did not rent the place out. 24% is terrible and I can not beleive we have to pay 24% of a rental income if we do not rent the place out,  what other nightmare taxes do we have to pay can anyone tell me.

People keep saying that we need to keep the property,  and we keep saying that we can only just about aford our house in UK and we can not cope with other bills for a proptery which may take years to sell in spain. 

Like me is there other people who are annoyed at the taxes us uk citazens have to pay in spain, as if we do not get ripped off enough in the UK.

Many thanks for any replies

Kind regards

 Hi Holdtight

This may help

''Property for own use 
Form 210 
Filing period: January 1 - June 20 of the following year. 
(Form 214 is the single form for declaring both property tax and income tax, with the filing period any time during the following year.)

The income to be declared is a percentage of the cadastral value of the property, as indicated on your property tax receipt. It is 2%, or 1.1% if the property's cadastral value was revised after January 1, 1994. The tax rate is then 25% of this "income". If you didn't own the property for the entire year or if it was rented for part of the year, then you would prorate the amount accordingly. Note that the rules regarding this tax were modified significantly on March 1, 2004.

A non-resident whose only taxable property in Spain is a dwelling fundamentally for own use may elect to use a single form for declaring both property tax and personal income tax on the estimated income from the use of that dwelling.''

We owned our property for 61 days last year and the tax came to 6.30Euros so for a whole year it would be around 38 Euros. Its bases on the Castorial value I think  which is very low. Yes, when I first heard about all the taxes I was really worried. to be honest they are not too bad. However death duties are another subject.

You will need to pay two taxes the first being the IBI, for which a bill is sent out each year by the SUMA office in your area..  If you have your father's paperwork you will probably find a bill from a previous year which will give you an idea of how much this will be or he may have set it up to pay by direct debit from his bank.  I presume the solicitor dealing with the case will also have access to this information for you.  This tax is payable by all Spanish property owners regardless of residency status.  Second tax as a non resident is known as 'renta' which is not to be confused with the tax you would pay if you did infact rent out the property.  As quoted by Kev2006 this is a pretty minimal figure now.  Have a look at our website for more info and a simple, cost effective way to pay the non resident tax.  If you have inherited the property this year it will be 2010 before you become liable for the renta tax.  If you do decide to rent out 24% is the correct figure for tax payable on all income received.

I recently complained to Brussels about the discrimination of the tax on non-resident property owners - without success!  Their answer was that it applies equally to Spaniards who own a second home.  They did not accept my argument that a non-resident may not necessarily have a second home.  However they did regard the inability of non-residents to set off expenses against rental income as being unfair.  It may be that in future we will be able to negate any liability by setting off our expenses.