Volker Horch: Residents in Spain are subject to Property Tax (IBI – Impuesto sobre Bienes Inmuebles), which is levied by the local municipality. In addition, if the property is a second home (segunda vivienda), residents may also be subject to Personal Income Tax (IRPF – Impuesto sobre la Renta de las Personas Físicas). If you are a non-resident, you must also pay Non-Resident Income Tax (IRNR – Impuesto sobre la Renta de no Residentes), which is administered by the Spanish Ministry of Finance (Hacienda).
Volker Horch: Property Tax (IBI) is a tax that must be paid without prior request. The amount can be checked at your local town hall from November onwards. To avoid possible complications in the long term, it is advisable to arrange a direct debit (domiciliación) with the municipality. In addition, the municipality may charge waste collection and water fees on a quarterly basis. It is also worth noting that, since 1 January 2016, payments can also be made from a foreign bank account.
Volker Horch: Tax relating to a second home forms part of Spanish residents' annual Personal Income Tax (IRPF) return.
Volker Horch: Yes. Non-residents must file a Non-Resident Income Tax (IRNR) return, which is usually handled through a fiscal representative if the owner does not reside in La Palma. The representative submits the return to the Spanish State Tax Agency (Agencia Estatal de Administración Tributaria) and pays the corresponding amount on behalf of the owner. The tax is calculated on the basis of the property's cadastral value. A notional income of 1.1% of the cadastral value is assumed and taxed annually at 19.5%. In municipalities where cadastral values have not been updated, the percentage applied is 2%. If the property does not have a cadastral value, the taxable base will instead be the value stated in the public title deed.
