RENTA - Changes Re Imputed Income On 2nd Homes

If you own a second property in Spain, besides the ´vivienda permanente´ that you live in permanently, you need to be aware of the change in the tax regulation for this year´s Renta declaration.

The tax on the benefit of having a 2nd property will increase from 1,1% to 2% if the latest general evaluation of the catastral value in the town the property is located, has not taken place in the 10 years before the present tax year, so for this year´s RENTA that would be if the latest evaluation has taken place before 1.1.2005 (used to be 1994). You can find the date of the latest evaluation on last year´s IBI bill.

Note: the same is true for those that own property here, but are not residents and need to file their  ´non resident´ tax return by the end of December this year (except for nonresidents who own more than one property in Spain, who must make their declarations between May 10 and June 30 of each year).

If you own a second home outside of Spain, so no catastral value is available, the percentage to calculate the imputed income is 1,1% over 50% of the acquisition cost of that property.

If you are collecting and declaring rental income then the imputed income only applies during any periods when the property is empty, in which case the rules as described above apply. If you rent out your property year round, then there´s no need to apply this percentage to calculate imputed income, as you will declare actual rental income.

Residents will include any rental income on the yearly RENTA declaration, non-residents need to declare it with Modelo 210, quarterly, within the first 20 days of the months following each quarter, so April, July, October and January. On the yearly non-resident tax declaration, due in December of each following year (so in December 2016 over tax year 2015), you declare the pro rata imputed rental income over the months you didn´t receive any actual income.

With thanks to our tax expert Philip Carroll for checking the facts and proofreading 🙂

Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.