How much taxes I will pay if I rent my property in Spain?

If you are owner of a property in Spain and you are thinking about renting it, above the expenses that you are paying now, you will have to pay Non resident taxes in Spain to declare the income that you are receiving from the tenant.

You will have to pay the IRNR taxes from the 1 to 20th of each quarter in April, July, October and January and also, you will have to make a yearly declaration tax.

If your tax resicence is in the EU, Iceland or Norway, you will have to pay the 19% from the benefit (incomes – expenses).

If you are non resident in the EU, you will pay the 24% from the benefit (incomes – expenses).

The incomes that you will have are clear: the rent from the tenant. And the expenses that you could deduct are:

A.- The interests of the mortgageand other expenses from that, as well as the costs of conservation and repair.
For these purposes, they will be considered as repair and conservation expenses:

• • Those carried out regularly in order to maintain the normal use of material goods, such as painting, revocation or arrangement of facilities.
  • The substitution of elements, such as heating installations, elevators, security doors or others.
  • The amounts destined for expansion or improvement will not be deductible for this concept.

Important:

The total amount to be deducted for these expenses may not exceed, for each good or right, the amount of the full returns obtained. The excess can be deducted in the following four years, without exceeding it, together with the expenses for these same concepts corresponding to each one of these years, of the amount of the full returns obtained in each one of them, for each good or right.

B.- Non-state taxes and surcharges, as the City Hall Taxes.

C.- The amounts accrued by third parties in direct or indirect consideration or as a consequence of personal services, such as administration of the building, surveillance, goal or similar.

D.- Those caused by the formalization of the lease, sublease, assignment or constitution of rights and those of legal defense relating to property, rights or income.

E.- The balances of doubtful collection provided that this circumstance is sufficiently justified. This requirement will be understood fulfilled:

• • When the debtor is in a contest situation.
  • When between the moment of the first collection management carried out by the taxpayer and that of the end of the tax period, more than six months had elapsed, and no credit renewal had taken place.
  • When a doubtful balance was collected after its deduction, it will be computed as income in the year in which said collection occurs.

F.- The amount of the insurance contracts, whether civil liability, fire, theft, breakage of glass or other of a similar nature, on the goods or rights producing the returns.

G.- The amounts destined to services or supplies.

H.- The amounts destined to the amortization in the conditions established in the article reglamentariamente.

And the amount defined to the AMORTIZATION OF REAL ESTATE CAPITAL INCOME are (Article 14 Rgl.) will be the result of applying 3 per 100 on the greater of the following values: the acquisition cost paid or the cadastral value, without including the land value.

When the value of the land is not known, it will be calculated by apportioning the cost of acquisition satisfied between the cadastral values ​​of the land and the construction of each year.

If you have any doubt, please feel free to contact us.