Annual taxes for property owners in Alicante

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Posted and filed under Property in Spain, Taxes in Spain.

As a Home Owner in Spain, can you tell me what taxes I am liable to pay annually? And how can I pay them?

There are two annual taxes which all Home Owners in Spain must pay:

 

1. Real Estate Tax (SUMA or IBI or Council Tax)

This is a local tax which the Council imposes on all property owners.

All the property of each municipality is included in a census and a value is assigned; the land value or cadastral value. The tax is based on a tax scale established by the area, the land value, and the size of the property, including all components like the house, pool, garage, so if you have extended the property and the Council has not been informed, you should be aware you can be fined and certainly the situation must be sorted before you sell. If you need help with updating the legality of your property, please contact us and we will guide you.

The notification for SUMA or IBI bill is posted out directly to the property for the previous calendar year, usually paid by early October of the following year. Now is the time you should be receiving the bills. If on direct debit, you need do nothing. If you have not set up a direct debit, then the notification has a slip at the bottom and should then be taken to be paid at any of the participating banks.

If you have not been paying this SUMA or IBI bill, we urge you to contact us to get up to date, as at some stage an embargo on your car, or your bank account, or your house will appear.

 

2. Income Tax (Individual income tax or Non-Resident tax)

 

Calculation and payment of the Individual Income Tax can be a complicated business. Individuals are deemed as Residents if they meet any of these conditions:-

– they spend more than 183 days per calendar year in Spain
– their main place of business is indirectly or directly located in Spain

Residents are taxed on worldwide income. If you think you should be making Resident tax Returns, please contact Ana  for an appointment.

Non-Resident tax is the commonly used term for the tax on Non-resident Spanish property owners. Many people do not realise that regardless of whether or not their property in Spain is rented out, they have to pay tax individually each year.

When a property is owned by a married couple or various different people, each person listed on the Title Deeds is defined as an independent tax payer, which means that an individual tax return must be separately filed by each of the co-owners.

If the property is only used by the owner and not let, the tax is based on an estimated income of the property´s catastral value. The Return has to be presented and paid by 31st December each year, for the previous calendar year, so a year in arrears. If the property is rented out, this tax is payable, but also a separate tax based on rental income.

Now is the time that many people are coming over to their property in Spain and they should not forget these payments, both SUMA (the local Council tax) to be paid by October and the Non-Resident tax, to be paid by December. If you have never paid these and need some advice, please contact Ana  You may find that to put things right does not cost as much as you may imagine, and will save you many a sleepless night when you realise that eventually non-payment of these legal obligations will cause problems.

 

3. Property Tax (Wealth Tax)

For those of you that remember Wealth tax, and many people still mention it, this was abolished in 2009, then re-introduced temporarily for 2012 and 2013 and has now been set at a high exemption per person except in Catalonia  so please do not worry about that one.

Some people say well my neighbour has never paid non-resident taxes and not been caught. We would advise that is irrelevant, they may be tomorrow, and they may be sorry that they did not comply with the law regarding taxes in Spain, and saying that they were unaware is not accepted as an excuse.

Lastly, it is a mistake to resist making a tax return as a resident when you might clearly be one (for example living in Spain more than 183 days). There are a number of tax advantages, for example, a seller of a property that can prove his tax residency in Spain for the past year will not have 3% deducted from the selling price for potential capital gains tax.

Spanish Solutions can provide Fiscal Advice, Assistance and Representation with all of these taxes. Please contact the office directly on 966 761 741 for further information.

28 Comments

  • ADRIAN OLLIER

    I have had property in Spaiñ for 8 years and only found out recently about property tax , I obviously need to pay , will they back date it 8 years

    • Nicola Ryan

      Good morning Adrian,

      Thank you for your enquiry.

      When you have a property in Spain, and are non-resident, you are liable for Non Residents Tax and also the council tax. We will contact you directly to confirm which tax it is. We can help you with this for sure.

      We look forward to speaking with you.
      Kind regards
      Nicola

  • Francis Kelly

    I have a house in Spain and my suma is due I live in the uk how do I make arrangements to pay. my Bill’s go to my home in spain and due to covid cannot get over

    • Jane

      Hi Francis

      We can arrange this for you if you send a copy of your passport and sign an authority form, or you can contact your local Suma office to pay direct.

      Kind Regards

      Jane

  • nicola machin

    due we pay for the last years suma or for the upcoming year in advance

    • Jane

      Hi Nicola

      The September payment is for 2020.

      Kind Regards

      Jane

  • Kristina Vasiliauskaite

    Suma tax is taken out from my account with few different amounts (same property, for the same year, same day money taken out) – is it normal, and shouldn’t it just be one amount?

    • Jane

      Hi Kristina

      Without sight of the bill we cannot comment. Your property tax would normally be taken out just now, but Suma can be tax for other things and this may be the other debits.

      Kind Regards

      Jane

  • Jerry long

    I have extended my property and want to sell what would cost to put things right

    • Jane

      Hi Jerry

      We would need further detail can you please e mail or call us and we can discuss this further.

      Kind Regards

      Jane

  • L. Leach

    I received an IBI bill in October (first since 2000 when I brought property)

    After ordering a new Padron I went to local office (as address was different from my Padron Address) and to enquire what it was (sum was 561.00 euros). They sent me to Aydamiento who told me they did not know what I was talking about.

    I have now received a notification from my bank of Embargo stated as over 6,000 euros with 17.00 euros ‘withheld’.

    I am only receiving 430 euros per month over 55 allowance from Spain. I have no other income at all. I live alone and have no family or friends here.

    It is a rural property with no water/sewage or street facilities and I purchased it in 2004.

    I am very distressed and would ask could you please help. I have no money in bank or anywhere else.

    • Jane

      Hi Lesley

      I am unsure what service you require for us to do. Can I suggest you go back to your local office with details of the Bank embargo as we cannot comment with the limited information. I hope they are able to help you further.

      Kind Regards

      Jane

  • Roger

    I own a small ruin in Sierra Bernia. I am non resident. I have found out that my fiscal representative has been paying SUMA on my behalf on the wrong property (Land Reg states that I do not own this property). I have never received any paperwork from them, just the amount to pay. I have tried to sort out this mess but no one gets back to me. It seems to be aa Cadastral error.

    • Nicola Ryan

      Good Afternoon Roger,

      We can help you with this, we would need a copy of your title deeds and SUMA, we would need to go back to the very beginning when the property was registered in your name. We will contact you directly to discuss this matter in more detail.

      Kind regards
      Nicola

  • Rene Gabriel Naudo

    Hello I have not been able to pay my SUMA bills and have now received, communication previa embargo inmueble. What does this mean? Is it just an embargo on the property or can they take the property??

    • Tracie Miles

      Good afternoon Rene
      Firstly your bank account will be seized and if you do not pay then you could be forced to sell your house. However, this is not very common.
      We can help you to find out how much you owe, please send us a copy of the letter you have recieved and we can go from there.
      Our fee would be 30€ plus IVA.
      Wait to hear from you.
      Kind regards
      Tracie

  • Ross Hall

    Hi, we are interested in buying a retirement property in Southern Spain. We see many beautiful detached villas, with extensive land but at what seems bargain prices. Is this because land tax as well as property tax has to be paid annually, often making the proposition financially inhibitive in the long term ?
    Many thanks for any help in this regard.

    • Amanda Thomas

      Dear Ross, It is very difficult to comment. Prices vary in different areas and yes there is property tax and land tax but generally if a property is at a low price it needs someone to investigate the legality and probably a survey, Kind regards

  • Errol De kraan

    I am moving home in Spain, who do i contact, i pay by direct debit please.

    • Nicola Ryan

      Good Afternoon Errol,

      Thank you for your enquiry.

      We can help you change the utilities from the sellers name to the buyers name or vice versa. We will contact you directly to discuss this matter further.

      Kind regards
      Nicola

  • Loraine Morgan

    Hello, i live in Irelanf but i bought a small apartment in Spain in 2020. I wish to pay any associated tax (Suma etc) but don’t know how much i owe. My apartment is for my private use, i dont intend to rent it. Please help.

    Kind regards
    Loraine Morgan

    • Tracie Miles

      Hi Lorraine, thank you for contacting us. Please advise the location of your property to see if we can help you.
      Thank you
      Kind regards
      Tracie

  • Julie Sharpe

    I have just completed on my property and I would like to found out what is payable at the end of this year for Suma I take it from what is stated I have nothing to pay until next December, how do i also find out the yearly cost, will this be sent to me?

    • Nicola Ryan

      Afternoon Julie,

      Thank you for your enquiry.

      If you bought your property this year, the seller would have been liable for this year’s SUMA.

      Your Solicitor should be able to provide a copy of the SUMA bill for this year, which will give you an idea to what will be due for the SUMA for 2022. We hope this helps.

      Kind regards
      Nicola

  • Josh Bradbury

    Hello,

    Do both partners in a married couple pay IBI?

    Thanks

    • Nicola Ryan

      Good Morning Josh,

      Thank you for your enquiry.

      The IBI is for the property and is only in one persons name Would you be referring to the non residents tax, if so, every owner pays tax on their share. The is calculated on the catastral value of the property. Should you need any assistance with the non residents tax, please do not hesitate to contact us.

      Kind regards,
      Nicola

  • Debbie Hind

    I have just put my Spanish home on the market, the estate agent is looking for an up to date Zuma Aviso de recibos domiciliados, and other utilities bills. I have not been living here as went home just before covid & have only just been able to return. I do not seem to have had up to date paper receipts. Please can you advice how I can get hold of up to date information that I require.

    • Nicola Ryan

      Thank you for your enquiry Debbie,

      We can help you with this for sure.

      We would need your passport, NIE and signed authority. We will contact you directly to discuss this matter further.

      Kind regards
      Nicola

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