Non Residents taxes

It’s important to know what your obligations are as a non-resident in Lanzarote, so you don’t get caught out. I know that in the excitement of buying a property here on the island the legalities often get overlooked, so I’ll explain them below.

It might seem intimidating at first, but I can support you with all your tax and accounting needs, taking care of everything so you can relax and enjoy your holiday home without any added stress.

So, how can I help?

Spanish Property tax

A lot of owners are still not aware of this, but if you own a property in Lanzarote which you don’t rent out, you’re still obligated to submit an annual return based on the cadastral value of the property.

This is the Spanish Property tax, or Imputed Income tax. The imputed income is 1,1% of the cadastral value. After calculating the imputed income, we can work out how much tax you’re due to pay based on your non-resident tax rate.

For residents of the EU, Norway and Iceland, the rate is 19%. For all non-EU citizens it’s 24%.

If you are a couple owning a property, both of you must make a declaration.

We can find the catastral value using your IBI receipt (the equivalent of your council tax), which is paid each year.

This Spanish Property tax is not related to income or salary, and is still payable on top of any tax due on rental income if you do decide to rent out the property.

If you do rent out your holiday home, I can help you make sense of your obligations and submit the tax declarations on your behalf.

Wealth tax

The wealth tax, also known as the “Impuesto de Patrimonio” is a tax on your assets, including property, investments, savings, cars, boats, artwork, jewellery etc. when their combined worth exceeds 700,000€. 

The rate of tax charged is progressive, from 0,2% to 3,5% depending on the level of wealth. 

It’s a compulsory tax which must be filed for each individual, meaning you can’t do a combined return with your spouse or partner. 

I can take care of all the calculations on your behalf and submit your return for the deadline at the end of the year. 

IBI and basura

If you own a home here in Lanzarote you’ll need to pay your rates each year. The IBI is the equivalent of the council tax back in the UK and the Basura is a contribution towards the local rubbish collections.

Capital gains tax

If and when you choose to sell your property in Lanzarote, you’ll need to pay a capital gains tax of 19% on the profit made. 

On the day of sale, it’s common practice for the purchaser (or their lawyer) to withhold 3% of the amount of sale which will be paid to the Tax office as an estimate of the tax you’re due to pay. We then calculate the exact amount, and either request a refund or submit the balance due.

I can take care of this for you and also deregister you from the tax system if you’ll no longer own property on the island.

You can deduct fees associated with the purchase and the sale, for example, notary and legal fees. We’ll advise you on all possible deductions when we meet. 

Inheritance and gift tax

Regardless of where you live, if you inherit or accept any asset or money in Spain, you’ll pay tax on it in Spain.

For inheritance, once you’ve arranged the inheritance title deed with a solicitor, I’ll be able to calculate and file the return for your tax. 

The amount will vary based on the line of succession and where the donor or deceased person lived. 

I advise you to check with an accountant in your own country of residence in case you also have to declare tax there. If you do, you should be able to offset one against the other. 

Payment of debts

If you haven’t been paying your taxes because you weren’t aware of your responsibility, please don’t be frightened to contact me, I’m here to help.

I’m not the tax office or the town hall, I’m on your side and I can help you sort out whatever needs to be taken care of. It’s much better to clarify your situation rather than get a sweat on every time the mail man arrives, waiting for a letter or a fine to appear.

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