Unsubmitted Tax returns!

[katel0908]

I bought a property (32k cash) - a ruin - in Spain 5 years ago and have only just learned that I should have been submitting an annual tax return as in Spain they treat any property as having the means to be rented out and making money for which you have to pay tax. The house is still a ruin but we are about to start building soon.
I heard there are huge fines for anyone having not paid up irrespective of whether you have made a genuine error. Can I own up and offer to pay any retrospective tax and will this eliminate their desire to fine me?
If I am still fined how much would this be?!! Very worrying!

[DesktopCommando]

Council Tax / Rates

Counil tax (Impuesto sobre Bienes Inmuebles - IBI) is a small, annual, compulsory levy by municipalities on the value of a person's property.

Each Town Hall (Ayuntamiento) places an assessed cadastral value on the property and a tax rate, usually between 0.4 percent and 1.1 percent, is applied. Both the value and the amount can be found on the bill.

Although usually automatically issued by the Ayuntamiento, there is no obligation for them to do so. As such, the emphasis should be on the owner to request the bill.

Payment can be made by Direct Debit or over the counter in any branch of certain designated banks.
Non-resident Property Tax

The non-resident property tax (Impuesto Sobre la Renta de no Residentes) is a national tax for non-Spanish residents. This applies if you do not live in Spain but own a non-rented property and have no other source of taxable income in Spain.

The amount is derived from the cadastral value of the property. This amount can be found on the IBI / council tax bill. The payable amount reads as 24 percent of a taxable amount calculated as 2 percent of the property's cadastral value (found on the IBI bill). This should be submitted using tax form 210.

If a property is rented then income tax must be paid on the gross amount of rental received at a rate of 24 percent.

The tax for the previous year must be paid before 30 June of the current year.
For further information: PM Me as MOD's dont like external Links

Oh yeah later when building you can get exemptions

Allowances and tax credits

The main allowances and tax credits in force are the following:
Housing tax credit: a credit of 15% of the amount invested in acquiring or refurbishing the taxpayer's habitual residence is granted; the percentage is applied to the investment made, the purchase expenses and the interest and expenses paid on debt, and the amounts deposited in home-purchasing saving accounts an used for the acquisition of the habitual residence.

[xabiachica]

Originally Posted by DesktopCommando

Council Tax / Rates

Counil tax (Impuesto sobre Bienes Inmuebles - IBI) is a small, annual, compulsory levy by municipalities on the value of a person's property.

Each Town Hall (Ayuntamiento) places an assessed cadastral value on the property and a tax rate, usually between 0.4 percent and 1.1 percent, is applied. Both the value and the amount can be found on the bill.

Although usually automatically issued by the Ayuntamiento, there is no obligation for them to do so. As such, the emphasis should be on the owner to request the bill.

Payment can be made by Direct Debit or over the counter in any branch of certain designated banks.
Non-resident Property Tax

The non-resident property tax (Impuesto Sobre la Renta de no Residentes) is a national tax for non-Spanish residents. This applies if you do not live in Spain but own a non-rented property and have no other source of taxable income in Spain.

The amount is derived from the cadastral value of the property. This amount can be found on the IBI / council tax bill. The payable amount reads as 24 percent of a taxable amount calculated as 2 percent of the property's cadastral value (found on the IBI bill). This should be submitted using tax form 210.

If a property is rented then income tax must be paid on the gross amount of rental received at a rate of 24 percent.

The tax for the previous year must be paid before 30 June of the current year.
For further information: PM Me as MOD's dont like external Links

Oh yeah later when building you can get exemptions

Allowances and tax credits

The main allowances and tax credits in force are the following:
Housing tax credit: a credit of 15% of the amount invested in acquiring or refurbishing the taxpayer's habitual residence is granted; the percentage is applied to the investment made, the purchase expenses and the interest and expenses paid on debt, and the amounts deposited in home-purchasing saving accounts an used for the acquisition of the habitual residence.

external links are fine as long as they are not promoting your own business

[Alcalaina]

Originally Posted by katel0908

I bought a property (32k cash) - a ruin - in Spain 5 years ago and have only just learned that I should have been submitting an annual tax return as in Spain they treat any property as having the means to be rented out and making money for which you have to pay tax. The house is still a ruin but we are about to start building soon.
I heard there are huge fines for anyone having not paid up irrespective of whether you have made a genuine error. Can I own up and offer to pay any retrospective tax and will this eliminate their desire to fine me?
If I am still fined how much would this be?!! Very worrying!

I don't think they charge huge fines, but they do add interest so it will mount up.
We got charged an extra 5% for paying it a month late (we were in the UK and didn't get the bill in time).

[Alcalaina]

Originally Posted by DesktopCommando

Council Tax / Rates


The tax for the previous year must be paid before 30 June of the current year.
.

I think this must depend where you live as ours have to be paid between 1st September and 30 November - we live in Provincia de Cadiz.

[Beachcomber]

Non-resident income tax is applied to non-resident property owners weather Spanish or foreign who do not rent out their properties. If someone is a 'non-Spanish resident' they would have to do a normal tax return just like a resident Spaniard.

The tax base is only calculated at 2% of the valor catastral if it has not been revised since 1994 otherwise it is calculated at 1,1% to which the 24% is then applied.

The 30th June deadline only applies if the non-resident owns more than one property otherwise it may be paid at any time during the financial year following that in which it becomes due, ie tax for 2009 may be paid between the 1st January and 31st December 2010. This is not location specific.

Each person named in the escritura must submit a separate tax return. There is no facility to submit a joint declaration.

[Beachcomber]

To answer the other points in your original question, you could pay the back taxes for non-resident income tax to 2005 but you would probably still be fined for late submission and the returns prior to 2008 would have to be submitted on form 214 as you would also need to pay wealth tax for those years. The payment of wealth tax (patrimonio) has been suspended since 2008. It may be best if you just start paying as from now. They may or may not catch up with you and ask you for the back taxes but the fines are likely to be the same.

You should check that you are paying IBI and basura (rates and rubbish collections) to the town hall. Take your escritura to the town hall and check. If you have not been paying you will be required to pay as from 2006 with surcharges of, probably, 20%. Failure to pay the IBI and basura could result in your property being embargoed.

Did you have anyone acting for you when you made the purchase? You should have been made aware of all of this at the time and a copy of the most recent IBI receipt should have been incorporated into your escritura unless your agreement to a waiver of this requirement was written into the escritura.

Finally, the forms 210 are very easy to complete. They are available from the AEAT web site here:

http://www.aeat.es/AEAT/Contenidos_C...a.pdf#zoom=100

and may either be completed on line then printed out or printed out and completed by hand. Payment is made at any bank however you will need to register with your local tax office and obtain sticky labels bearing your name, NIE number and a bar code which you stick onto the forms. The AEAT form for completing this procedure can be found here:

http://www.aeat.es/AEAT/Contenidos_C...030/mod030.pdf

but if you go along to the tax office with your passport, NIE form and your escritura, plus copies, you will probably find that they will do it for you.

[Beachcomber]

One more point, the information regarding non-resident taxes is obviously based on the assumption that you are a non-resident. If you spend more than 183 days of the year in Spain you should be submitting resident tax returns in May or June but that's a whole different ball-game.

[Beachcomber]

Sorry to drag up this old thread but just in case there are any non-resident property owners on this forum who actually pay their non-resident income tax I thought you may be interested in these latest developments.

There is a new style form 210 on which to declare this tax of which this is an example:

http://www.aeat.es/AEAT/Contenidos_C...0.pdf#zoom=100

If you buy the form from the tax office it will be the old style form as they have hundreds of thousands of them in stock and do not want to waste them.

You can no longer download these forms from the internet but you can complete the formula online here:

https://www2.agenciatributaria.gob.e...0b.html?idi=ES

then generate and print out a .pdf file which you can take to the bank for payment in the usual way.

If you have, or are going to obtain, a digital certificate you can do the whole thing online without printing out the forms or going to the bank.

The claim for repayment of the non-resident capital gains tax retention now has to be done on this form in the same way. Form 212 has been discontinued.

[djfwells]

This issue happened to me.

I bought a plot and a ruin, did absolutely nothing to it in the 4 years that I had it.
In that time I moved to Spain, got a job, bought a new house and became a Spanish Resident. When I sold the property I was advised by my Lawyer that there would be an amount of unpaid Taxes, plus penalty, plus interest that would need to be deducted from the sale. I had made a profit on the sale so wasn't overly upset.
After divvying everything up the total sum paid becuase of said unpaid taxes was just over 200Euros.

I'm sure that the amount varies depending on : The size of your plot; where it is; what condition it is in; it's value ; how sharp your local Ayuntamiento is and importantly, how good your Lawyer / Asesor is.

I do know that it is a very common problem, so I wouldn't panic too much.