FISCAL REPRESENTATION IN SPAIN

By law a non-resident owner of more than two Spanish properties should appoint a fiscal representative in Spain.

Failure to do so may result in a fine of between 150 euros and 6.000 euros. Those who only own one property in Spain are not obliged by law to appoint one, but it is in their best interest to do so.

As part of our service we take care of filing your non resident tax declarations to the Spanish Inland Revenue as well as keeping you informed of your fiscal obligations based on the properties that you own in Spain.

In relation to this, please note the following:

• Any non resident individual owning a property in Spain is liable for the payment of both Wealth and Income Tax.
• These taxes must be paid on an annual basis. If you bought your property in 2004 then 2005 is the first year you have to pay your taxes. If you bought before this date, we are also able to update your taxes, at your request.
• Should you fail to pay them at the sale of your property in Spain, you will not be able to recover the 5% retention on the sales price made on account of possible capital gains tax. In other words the Tax Office will deduct your Wealth and Income Tax for the previous five years, plus accrued interest over that period of time and the corresponding penalty, from any potential reimbursement.
  
• The tax office, in order to give a value to your property for the calculation of the Wealth tax (previous years to 2008), will apply the highest of the following three:
  
  • The value of the property appearing in the local rates (catastral value) 
  • The purchase value appearing in the Purchase Title Deeds or "Escritura de Compraventa"
  • The fiscal value established by the administration Office.
• Any non-resident individual with a property in his name is subject to an Income Tax of 2% (or 1,1% if the cadastral value has been recently revised) on the value of the property. This tax is presently 25%. The Inland Revenue deems that the owner of the property is receiving an annual income equal to 2% of its value and a 25% tax is applied on this amount.
• The valuation for the Deemed Income Tax is the cadastral value shown on the Local Property Tax (IBI bill).
  

We can act as your fiscal representative, filing all the necessary forms and advising you of payments due to the Spanish Tax Authorities.