As we do every year, we wish to remind readers who are Non Tax Residents in Spain, that they are still obliged to pay Income Taxes in Spain for Non Tax Residents, even if they do not have any income in Spain, just for the fact of owning a property here.

If you live in Spain and but are not registered with the taxman as a tax resident or you do not submit taxes as tax residents, you could be legally considered as Non Tax Resident, as no notice has been given to the Tax Authority. Non Tax Residents could be liable to pay Wealth Tax, but only if the value of their assets in Spain (after deducting debts, i.e: pending capital of the mortgage, etc.) is above 700.000€.

If you are Non Tax Resident in Spain ( or you are not legally tax resident in Spain), you will need to pay tax for income in Spain (Income Tax for Non Residents, IRNR): i.e.: rents from a letting, interest on bank accounts, etc., If you do not have any income but you own a property or a share on a property, your tax bill will be based on a calculation as per the Cadastral Value (value that appears on your Spanish Local Rates receipt from the Town Hall, the SUMA office or the equivalent).

Even now it is quite common for people who are Non Fiscal Residents in Spain ( or not legally Tax Resident in Spain) to simply not pay this tax; usually due to ignorance or neglect and especially when they have no income in Spain and only own a house.

Caution is needed as the Spanish Tax Office, equivalent to the Spanish Inland Revenue (Agencia Tributaria), is investigating property owners in Spain who do not pay taxes as either tax residents or non tax residents, urging them to update their status and pay the applicable tax.