Annual return deadline ends 31 December


25 / Sep

The typical Spanish summer holiday in August has come to an end, and that means that our office will deal with the annual tax return for the non-residents. Most owners of a second home in Spain know that they have to file a tax return. But if an empty house, that you only use for a few weeks a year, does not generate income, why do you have to pay taxes?

The Spanish tax authorities levy tax on the income that the property in Spain acquires or is deemed to have acquired. This means that for rental income, as explained in our article of March 31, 2020, a tax return must be done on the actually received income. That makes sense, given that it is a source of income.

On the other hand, there is the income that a vacant house is considered to have generated. The tax authorities assume that the mere ownership of a home acquires added value every year to the total assets of the owner. This added value is calculated on the basis of a fixed amount. This fixed income is determined on the basis of a percentage of the cadastral value of the property.

The tax return must be paid in the year following the year of ownership. This means that when you buy the home in 2019, you must submit a tax return in the course of 2020. You have all year to do the tax returns. This is why some companies or “gestors” do the tax returns at the beginning of the year, while others do so only at the end of the year.

The time of submission of the tax return is not important, as long as this is done before December 31st of the following year (so December 31st, 2020 for the 2019 return).

If the tax return is submitted too late, the tax authorities will levy a fine. The amount of this fine may differ depending on when the tax return was filed.

– Selena Escandell Beutick