What tax obligations do I have on a rental property in Spain, if I live outside of the country?

Question

I am an American citizen who worked in Spain for several years before returning to the U.S. During that time I bought a house in Spain that is currently empty, but I am thinking of renting it out. What tax obligations will I have in Spain?

Answers

First of all, we should clarify that simply owning a home in Spain (regardless of whether it is rented out) creates the following tax obligations for non-residents:
– Income tax (impuesto sobre la renta): a taxable base would be calculated based on 1.1% or 2% of the catastral value of the home (the catastral value is the value the government has on record). The tax rate is a flat 24% for those who are non-EU residents.
Wealth tax (impuesto sobre el patrimonio): assuming that the home is your only asset in Spain, if its net value (acquisition value minus your remaining mortgage) is greater than 700,000 euros, there will be an obligation to present and pay this tax, which varies by autonomous region.
If you decide to rent the home, in addition to the taxes mentioned above, the rental income will also be taxed as income, at a 24% fixed rate, without the right to deduct any associated expenses. The presentation of the returns corresponding to the rental income, for non-resident taxpayers, are quarterly, so the tax would need to be presented and paid every three months.


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