(Annual tax declaration + Emergency assistance)
In the first place, we would like to take this opportunity to kindly inform you about the Annual tax return. We have indeed detected that this issue is still creating some confusion among our new clients.
First, if you own a property in Spain, it is automatically considered as a type of income. Consequently, all owners named on the Title Deed must submit an annual declaration. You MUST do it although you might be non-resident, or you might not have any regular income in Spain.
Second, you are liable to pay two totally different kind of taxes. 1) The IBI (“Impuesto Sobre Bienes Inmuebles” in Spanish) or local rate tax. 2) the Non-resident tax or rental tax (in some cases a combination of the two). So, what is the different between the two? The IBI is a council tax that must be paid (usually by standing order-direct debit), around September-October each year. It is collected annually and paid directly to the TOWN HALL or the SUMA offices, (depending on the case). It is based upon the cadastral value of your property.
On the other hand, the Non-Resident Income Tax is paid to the Tax Revenue Office. The deadline is December 31st.
Please find below a sample of the local IBI RATE, for your perusal.
A) Is it necessary to pay income tax in Spain even if the owner doesn’t live at the property?
Yes. Non-Resident income tax is payable by non-resident property owners who do not rent out their property. It is irrelevant whether you use the dwelling sporadically as a second residence or holiday house. The non-resident tax declaration covers the previous year. Therefore, in 2019, you will have to pay for the previous tax fiscal year, that is 2018.
B) What happens if the tax is not paid before the deadline of 31st December? How will the Tax office find out?
First, should you decide to sell your property, you might not be able to claim the refund of the 3% retention back from the tax office.
Second, you might be caught out through one of the Tax Authority’s anti-tax fraud campaigns. As a result, you might have to pay late payment interest as well as sanctions between 5% to 20%. In fact, the Spanish Tax Revenue is increasingly cross-referencing information. This includes, monitoring electricity consumption, bank’s accounts and comparing your details as logged on the Land Registry with utility usage. As a result, as a worst scenario, a disciplinary letter could be sent to your Spanish address. Failing torespond to the notification might imply that your bank account might be ultimately embargoed.
Please find below a disciplinary letter received by one client who neglected the annual payment of the Government tax. The tax office imposed a fine for late payment (we have deleted the personal details due to confidential data protection).
C) What paperwork would be required in order to prepare the Annual tax return form? What will be the cost?
1. Photocopy in color of your NIE and passport
2. Your address in Spain and abroad
3. Copy of your latest IBI receipt
4. Copy of the title deed (at least the first 4-6 pages)
These documents are required in order to calculate the current cadastral value of your property. Consequently knowing how much tax you should be paying, making sure that your Spanish property taxes are up-to-date.
In conclusion, we strongly recommend that either if you are tax resident or non-resident, you should hire a fiscal representative. A reliable and cost-effective fiscal representative, – like our Law Firm, – will make sure your non-resident taxes are paid on time. Likewise, we will be delighted to answer any queries you might have throughout the year as well. Remember that it is your responsibility to ensure your tax is paid. You will prevent any future unpleasant surprise from the Spanish tax authorities. In fact, for what ends up being only a small annual fee a regulated qualified lawyer is always well worthwhile. Do not wait for the taxman to knock on your door with a penalty proceeding against you!
2. Emergency Assistance
In the second place, we are delighted to include in our annual package this service as well. Therefore, should any urgency or unexpected problem arise (i.e. problems with the Utility companies, a letter from the SUMA office, an insurance claim), you will have complete peace of mind, that we will always be there to help you at any given time, and no matter the nature of the situation might be. We are trained to handle your situation, which will help ensure that your request is properly dealt with.
After this preliminary introduction, please find below the proposedlist of servicesto be provided annually:
I. ANNUAL TAX DECLARATION
1.- To check the required paperwork of your property
2.- To calculate the annual tax and to fill out the required tax forms
3.-To submit the tax form within the deadline
II. EMERGENCY ASSISTANCE
1.-Urgent response to your phone call or email request. Free face to face appointments.
2.-Managing calls and enquiries with public offices or service providers
3.-Free quotation of home, car, life or any other insurance
Transparent prices: Fixed fees
At BZN Lex, we dislike hourly rates as much as you do. Subsequently, wherever we can, we will offer you fixed fees. That means we will not charge you when we pick up the phone or send an email.
We are consistent on long term relationships with our clients. In fact, we measure the value of your choice largely by whether you come back.
We would like to kindly inform you that we offer the whole Annual tax return package of services for an annual reasonable fixed fee. Just 90 €for two applications and 50 €for just one applicant. (Prices do not include 21% VAT).
Furthermore, in case you might hire our services for this Annual tax return package, we will be most delighted to give you a very special price for other additional services that you might need. For example, home, car, or life insurance, Spanish wills, funeral plan, etc.
In short, always put your trust in a trustworthy independent Solicitor, like our Firm.
We will always be by your side. Please kindly check our testimonials section in our new website, https://www.bestsolicitorsinspain.com . You will find plenty of testimonials form real clients who put their trust in our Firm. Fortunately, they are extremely grateful for the excellent work offered, which fills us with a lot of professional pride.
We hope this preliminary information is useful for you. Should have any question or enquiry, please contact us and we will be delighted to help you.
Thank you for your attention.
Mr. Oscar Ricor
“NON-PRACTISING ENGLISH SOLICITOR IN ENGLAND AND WALES”, under the “Solicitors Regulation Authority” (SRA) SRA number 519196 and practicing Spanish Solicitor.