Many of our clients have asked us these questions about the legalities of living and investing in Spain.
We hope you’ll find this list useful
Hiring a local, independent lawyer is highly advised when investing in real estate in Spain. Your solicitor will make sure that your investment is safe and legal. They will deal with all the necessary documents for you: contracts, licences, legal requirements, taxes, etc.
02. RELOCATING TO SPAIN
“Número de Identidad de Extranjero” (N.I.E.) is your identification and Tax Number in Spain. You need a “NIE” for any official process in Spain, such as buying a property, working, paying taxes or applying for residency.
Yes, you need to open a Bank account in Spain to buy a property. You will need it to pay for your purchase, taxes, or secure a mortgage. Later on, you will need it to pay for utilities, yearly taxes, insurance, etc.
03. TAXES IN SPAIN
You must declare any income received in Spain: salaries, pensions, equity, property, rents, etc. Depending on how much time you spend in Spain, you will have to file for Resident Tax (IRPF) or Non-Resident Tax (IRNR).
Non-Residents who own a property in Spain must file for the Non-Resident Tax (I.R.N.R.) every year. The requirements vary, depending on whether you rent out your property or not.
Non-Resident Property owners in Spain who rent out their property must file a quarterly declaration.
Residents in Spain who meet certain criteria must declare their assets in other countries. This declaration (Form 720) includes real estate, bank accounts, stock or funds owned in countries other than Spain.
It depends on the time you spend in Spain:
- Resident for Tax Purposes: you live 6 months or more in Spain per year.
- Non-Resident for tax purposes: you live less than 183 days per year in Spain.
IBI and Non-Resident Taxes are two different concepts. Property owners in Spain must pay IBI to the Town Hall every year, whether they are residents or not. The Non-Resident tax is an income tax for property owners who live less than 6 months per year in Spain.
04. INHERITANCE IN SPAIN
Though not mandatory, it is highly advised. Managing an international inheritance can be expensive and time-consuming. Making a Spanish Will is a simple procedure that could save your heirs a lot of money and hassle in the future.