According to the Spanish tax law, non-resident owners of property in Spain have to pay a tax on the Spanish properties even if they earn no income from those such as rental income.
Many non-residents property owners think they have already paid this tax because they have paid local property taxes: Impuesto sobre Bienes Inmuebles (IBI). But you need to be careful, the IBI is another different tax to be paid in Spain so both taxes should have been already paid.
What happen if you rent the house out as a holiday lettings? You should have been paying taxes for the rental income quarterly but it is also independent of this tax. The non-resident tax the Tax Office is asking now for is paid for the period of time in which the property have been at its owner disposal. So, even when paying rental income tax it must be paid for the proportional part of the year.
The Spanish Tax Office (Agencia Tributaria) know the status of all properties and know whether they are owned and occupied and have started now chasing non-payers. That’s why we recommend you to catch up on previous years.
If you want advice on the costs and implications of unpaid taxes, contact us. From Consultoria VILE we will be very pleased to give you some guidance on this and offer our services on filling the tax form for you.