How to declare real estate of tax residents with assets in Spain and abroad

The tax advisor Andreu Soria from SORIA ASSESSORS analyzes and explains what income imputation means for a tax resident in Spain who pays personal income tax and owns real estate, on the one hand. Secondly, it explains how a taxpayer with tax residence in Spain who has a property in imputation of income located in Spain and another one abroad should be taxed.

In accordance with article 85 of the Personal Income Tax Law, when a property remains empty during the whole calendar year, or part of it, the taxpayer subject to Personal Income Tax must pay tax on that property whether it is located in Spain or abroad.

The case of a property located in Spain
When a property is located in Spain, the taxation will be as follows:

1.- If the real estate is located in a municipality where the cadastral values that have been revised or modified, it will be taxed at 1.1% of the cadastral value of the property.

For example, if the cadastral value of the property is 50,000 euros, the taxpayer will be taxed as follows:

50,000 * 1.1% * X/365 being X the number of days that the property has been empty (neither rented nor assigned to relatives).

Thus, if the property has been empty for 50 days during the calendar year.

50,000 * 1.1% * 50/365 = 550 * 50/365 = 75.34 will be the yield of real estate capital in the tax return of the corresponding year.

2.- If the property is located in a municipality where the cadastral values have not been revised, the taxation will be 2% on the cadastral value of the property.

The case of a property located abroad
If the taxpayer has a property located abroad which is neither rented nor is it a habitual residence, unlike what happens with properties located in Spain, the income will be imputed in the following way:

First.- The value of the property will be obtained according to the rules of valuation of the Wealth Tax.

Second: 50% of the value of the property determined in accordance with the first point will be taken.

Third: On this value, 1.1% will be applied, being this the real estate capital yield that must be imputed in the income tax return of the corresponding year.

This way of calculating the imputation of income appears reflected in the Consulta Vinculante V2481/19 of the Dirección General de Tributos (Directorate General of Taxes).