Spain is a very attractive destination to invest in a house for several reasons. First of all, the country has a warm and sunny climate most of the year, which makes it an ideal place to enjoy a holiday home or to retire.
Another factor that makes Spain attractive to real estate investors is its ever-growing economy. Spain has experienced an increase in foreign investment in recent years, which has led to an increase in demand for property.
In addition, the country has a strong infrastructure and a reliable legal system, which provides security and protection to investors; and it is a very popular tourist destination, which means that homeowners can earn significant income by renting out their properties during periods of greatest demand.
However, those who finally decide to bet on Spain should know that now foreigners with assets of more than three million euros net will have to face a new tax.
Complementary to the Wealth Tax, on January 1, 2023 the so-called ‘Solidarity Tax on Large Fortunes’ entered into force.
In principle, the tax will be temporary and will be in force during 2023 and 2024 (to render accounts of the previous year), although the worst omens lead us to think that it has come to stay. The tax will accrue on December 31 of each year and will affect the net worth of which the taxpayer is the owner on that date.
The Temporary Tax of Solidarity of Great Fortunes is a tax whose configuration coincides with that of the Wealth Tax. The fundamental difference is that it taxes only those net assets that exceed 3,000,000 euros.
Therefore, to avoid overlapping, the new tribute will begin to operate where the other ended. In this way, double taxation is avoided, since the taxpayers of the Solidarity Tax will only pay for the part of their patrimony that has not been taxed by its Autonomous Community.
Other taxes to watch out for if you are an investor foreign
If you are a foreign investor in Spain, there are several taxes that you must keep in mind, like:
- Non-resident income tax (IRNR): this tax is applied to income obtained in Spain by natural persons and non-resident entities in the country.
- Property tax (IBI): this tax is applied to the ownership of real estate in Spain, including rental properties.
- Tax on property transfers and documented legal acts (ITP and AJD): this tax is applied to the transfer of properties in Spain, including the purchase or sale of a property.
- Value added tax (IVA): this tax is applied to the purchase of new properties in Spain and is based on the value of the property.
Furthermore, it is important to note that foreign investors may be subject to other taxes and regulations, depending on their country of origin and their particular situation. Therefore, it is advisable to consult a tax adviser or lawyer specializing in real estate law to obtain personalized advice and guarantee compliance with all tax and legal obligations in Spain.
At G&G Studio we have a fully specialized team that can advise you when buying a house in Spain so that you know first-hand each and every one of the procedures and requirements to be able to carry out the acquisition. Ask us and we will tell you in detail all and each of the tax laws and tax obligations that you must comply with as a foreign buyer.
