Non-Resident Imputed Income Tax (NRIIT) in Spain

Unbeknownst to most non-residents, on buying property in Spain, you automatically become liable for a series of property-related taxes. No one will give you the heads up on them, so it is up to you to find out how much you owe and comply with the Spanish Tax Authorities.

In today’s post we are going to keeps it short and simple, featuring only one tax: Non-Resident Imputed Income Tax (or NRIIT, for short). 

Long story short, you only pay this tax once a year, on or before the end of December. This tax applies nationwide in Spain.

All non-residents who own property in Spain need to file once a year this testimonial tax.

Even if you do NOT rent out your property in Spain, you still need to pay it.

Also, if you do rent out the property part time during the year, on the days you do not rent out your property in Spain these are taxed as imputed income on a pro rata.

Basically, this tax is a legal fiction whereby it is surmised that you derive some form of financial benefit (income) from your Spanish home; that is why it is called non-resident imputed income tax, as it is deemed income. Spanish Tax Authorities take the view an owner derives a benefit in kind from owning property, irrespective of whether it is true or not, and taxes it accordingly.

Regarding the ongoing pandemic, the Spanish Tax Office takes the view of taxing the days your property stood empty and was not let, despite the mandatory enforced lockdowns.

• When is this tax collected? It is due on the 31st December of each calendar year.
• How much is it? It’s fairly low, normally spanning a few hundred euros.
• What happens if I don’t pay it? You will receive penalties, late interests, and when you sell your property you will forfeit the compulsory 3% non-resident retention on your sales proceeds.
• Is there a Statute of Limitations? Yes. Currently, for year 2020, the tax office cannot claim back this tax going further than 2015. So, if you own property in Spain, and are non-resident, you need to file the last 5 years of tax returns to be tax-compliant.