Spanish property taxes
Spanish property taxes – As an owner of property in Tenerife, you have to comply with a number of obligations, including declaring your property to the Spanish tax authorities. An overview of the two main taxes can be found below.
IMPUESTO DE BIENES INMUEBLES
As an owner in Tenerife, you must pay the IBI annually, which is the property tax, regardless of whether you are a resident or a non-resident, and each owner pays this tax. This must be paid around mid-June, either in person at the counter or through your bank. If you have had us take care of your purchase, it will be debited automatically from your Spanish bank account so that you don’t have to do anything!
IMPUESTO SOBRE LA RENTA DE NO RESIDENTES
As an owner and non-resident (in other words, you do not officially live in Tenerife for more than half a year and do not pay any income tax there either), you have to pay an additional tax on your property each year, the so-called Impuesto sobre la Renta de no Residentes. Popularly known as the Modelo 210. This tax is calculated taking into account the real income obtained from the property or a fictitious income. The declaration is individual and separate for each owner depending on the percentage of ownership of each property. So a couple who both own 50%, both have to file a declaration for 50%.
Please note that when declaring real estate in Tenerife, you will have to take the initiative to pay this tax, you will not be contacted by the government to do so. However, if you fail to pay, you will be fined 20% plus statutory interest.
You rent out your property
Tax when you rent out:
In these cases, the gross rental income is taxed at 19% for residents of the EU, Norway and Iceland, or 24% if you are a resident of another country, without the possibility to contribute any costs of the property as a non-resident. Also in this case, 19% is paid on the periods that the property is actually rented out. In the periods that the house is not let, the notional income tax is applied.
More information about renting out a property in Tenerife. as well as a blog article about long term renting in Tenerife.
You do not rent out your property
Tax when you do not rent out:
The tax is calculated on the basis of a percentage of the taxable value, which in turn is based on the property’s registered value. This percentage is different for each village, as is the registered value for each village. The calculated amount is considered as a fictitious income. This fictitious income applies for the periods that the house actually remains empty and is taxed at a tax rate of 19% for residents of the EU, Norway and Iceland, 24% if you are a resident of another country.