When you own a property in Spain and you do not live for more than six months in Spain then you are not resident in Spain. What does this really mean? It means that the Spanish Tax Office (Agencia Tributaria or Hacienda) look at your property as a source of income, even if you only use it personally, for you, your friends and family.
Every year, by law, you have an obligation to fill in a non-residents tax form (Impuesto de la Renta de no Residentes), and present it to the Tax office, and pay the related tax. (You must not confuse this tax with your Council Tax (IBI) that you pay to your local Town Hall every year).
Before the current economic crisis, The Spanish Tax Office did not give importance to the fact that most foreigners with property in Spain did not submit this form and pay this tax. That is why most owners do not know about this taxation and never have been informed by Hacienda about this obligation. However, today, due to lack of money, the Spanish Government has decided to become stricter about this and other matters. And that is why more and more owners are receiving notification from Hacienda to regulate their Property Tax situation, otherwise owners could be fined and be forced to pay unnecessary excess. The Tax Office can force you to pay the current year and the previous four years of tax due.
It is important to remember that not knowing the Law is not an excuse to ignore it, and even if you do not receive notification from the Tax Office, you are obligated to fill in the form and pay this Tax every year.
In this case the Tax is not a big amount. As an example, just for guidance proposes, we could say that a property valued at 100.000€ by the Spanish Tax Office, will pay around 100€ a year. We know that the value to calculate the Tax to pay is approximately 60% of the market value, although this value can vary, in relation to the location of the property, the last time they updated these values, etc. You can find this value (called “Valor Catastral”) for your property in any receipt of your Council Tax called “Impuesto de bienes inmuebles, I.B.I.” Just remember, this one must be paid every year to your local Town Hall, and it is a completely different Tax to the one that this article refers to.