Warning for non-resident, Spanish property owners

Last updated on March 19th, 2020 at 10:08 am.

Having a second home in another country is a wonderful luxury. However, it also requires taking care of. There are bills to pay, taxes to settle and the usual maintenance jobs – all with the added difficulty of being in another country and perhaps in another language.  It is very important to keep up with your obligations if you own a property in Spain. For example, you should make sure that you are able to keep track of the post arriving at your Spanish property. It can be an expensive mistake if you don’t.

Please check your letters

The Spanish Tax Authority started sending letters out in October last year warning residents and non-residents that it was time to regularise their situation. In other words, these Spanish property owners hadn’t made either a resident or non-resident tax declaration and the Tax Authority knew they hadn’t. For a while it went quiet. Until now. Only this week we have started to receive requests for help from people who had received one of those letters, ignored it and now wished they hadn’t.

A very big fine

To take one example. A couple with a house on Orihuela Costa received one of the first warning letters in November. They are non-residents but chose to try their luck and did nothing. In March they received not one but four letters each – one for each year since 2008 they had missed paying non-resident imputed income tax.

The letter from the Spanish Tax Authority (let’s call it letter number 2) presented the outstanding amounts for each year, gave them 15 days in which to appeal and warned them that if they didn’t then the necessary procedures would be put into action.

At this point the homeowners did take notice and went to the Tax Office to pay the outstanding amount. However, they were told that the back tax couldn’t be paid in this way and they would need to follow a complex procedure involving the issue of new bills.

They struggled to follow the instructions and the Tax Authority went ahead and took the money out of their Spanish bank account instead. In August the couple discovered that 942€ had been taken from their account – a withdrawal they knew nothing about. It wasn’t until another 900€ was deducted and their bank warned them that their utility bills couldn’t be paid that they brought the issue to us to sort out.

In Spain, it may not always be quickly but the wheels do turn and with the pressure to bring in revenue, you really are risking it if you choose to ignore official communications. But why leave it until then? Now is a good time for any non-resident who knows they are not paying one or both of the two mandatory Spanish property taxes, to fix it. The deadline for non-residents to make their non-resident tax declaration is the 31^st December.

To help navigate the bureaucracy of the Spanish tax system, our dedicated advisers are on hand to help at every step of the way. Contact us and we will offer you a free consultation without obligation.