What is the tax residency in Spain?
Individuals are resident in Spain for tax purposes if they meet at least one of the following criteria: Spend more than 183 days in Spain during a calendar year. In determining the period of stay, temporary absences are included in the count, except when the tax residence in another country can be proven.
Staying more than 183 days a year in Spain
If at the end of the year (counting the calendar year, from January to December), you add up all the days you have been in Spain and they are more than 183, you are a resident for tax purposes.
If you spend more than 183 days per year in Spain (6 months), you will be regarded as a tax resident. On the other hand, only living from 1 to 182 days in the country will imply you are a non-resident.
| Taxable income band € | National income tax rates |
|---|---|
| 0 to 12,450 | 19% |
| 12,451 to 20,200 | 24% |
| 20,201 to 35,200 | 30% |
| 35,201 to 60,000 | 37% |
If you did not spend 183 days or more in Spain during the calendar year (January 1 to December 31), you are in the world of non-tax residents. You may own a home or visit a few times a year, but you aren't in Spain over 183 days in a calendar year. Then you would not be liable for taxes in Spain.
How Long Can I Stay in Spain if I Own a Property? Even if you own a property in Spain, you're still entitled to stay for only 90 days in a 180-day period without applying for a residence permit or a visa. You can still buy or rent your property as you wish, but you must be careful not to overstay the 90/180-day rule.
Income Tax
Tax residents of Spain are taxed on their worldwide income at progressive rates. The exact rates vary from region to region. The highest, in the Catalonia and Andalusia regions, is capped at 49%.
Moreover, non-residents who are also property owners in Spain are legally required to pay taxes on their property, regardless of their non-resident status. In other words, they are legally obliged to pay the taxes derived from the ownership of their property, regardless of whether they are residents or non-residents.
Getting a NIE number does not allow foreigners to live and reside in Spain. Although EU citizens can live and reside in Spain, people of other nationalities will need to apply for residence in Spain (a different procedure more much complicated that getting the NIE number).
- What are the benefits of getting Permanent Residency that you don't get with Temporary Residency? ...
- You'll be able to work in Spain and/or start a business in Spain.
- You will be able to get health care from the state, you will no longer need private health insurance.
Do US retirees pay taxes in Spain?
If you spend more than 183 days per year in Spain (that is, 6 months), you will be regarded as a tax resident. That is the typical case of non-lucrative visa holders who receive a pension. Being a tax resident means you will pay income tax in Spain (“IRPF”) for all incomes you generate all around the world.
Spanish income tax
At the most basic level, Spanish tax residents are liable for to pay income tax on their worldwide income, once personal allowances have been taken into account. However, a non-resident of Spain is only required to pay tax on any Spanish income (such as rental income from a Spanish property).
One primary benefit of the US-Spain Tax Treaty is the relief from double taxation. In other words, the double taxation relief allows a person to claim a credit for taxes paid in the other country to avoid double taxation.
Can Foreigners Buy Property in Spain? In short, yes! The Spanish government welcomes and even encourages foreign buyers in general. Though if you are specifically looking to buy a holiday let, you might need some legal help with the bureaucratic part of it.
How long can I stay in Spain without becoming a resident? You can stay in Spain for a maximum of 183 days per year (6 months) in order to not become a resident. If you spend an extra day (184 days and onwards), you will be regarded as a resident, hence paying resident taxes in the country.
Yes, it is totally possible to buy a home in Spain even if you are not a resident. As we have already mentioned, the foreign non-resident buyer will be required to obtain the NIE in advance, which must be requested at the General Immigration Office.
In calculating the proof of income for non-lucrative residency, you must have an annual income of 400% of IPREM in your bank account. The IPREM for 2023 is €600 per month. Therefore, as an individual, you will need to have €2,400 as a regular guaranteed monthly income or a yearly income of €28,800.
Yes, if you are a non-EU citizen, you can obtain a residence permit in Spain valid for 3 years as long as the property you purchase is valued at over €500,000. This residency is famously called golden visa, and comes with great advantages (which we will explore below).
Entry, Exit and Visa Requirements
Spain is a party to the Schengen Agreement. This means that U.S. citizens may enter Spain for up to 90 days for tourism or business without a visa. Your passport should be valid for at least three months beyond the period of stay.
Pension Paid by a Foreign Government Employer
In the case that a double tax treaty exists between Spain and the other country, pensions paid by former State employees are usually exempt from income tax in Spain. Most countries have a double tax treaty with Spain, including of course the UK. Brexit has not changed this.
What taxes do US citizens pay when living abroad?
If you are an American living abroad, you must file a US federal tax return and pay US taxes on your worldwide income no matter where you live at that time. In other words, you are subject to the same rules regarding income taxation as people living stateside.
The Spanish National Healthcare System ("Instituto Nacional de la Salud"), founded on Spain's General Healthcare Act of 1986, guarantees universal coverage and free healthcare access to all Spanish nationals, regardless of economic situation or participation in the social security network.
| Age | Tax-Free Personal Allowance |
|---|---|
| Under 65 years | €5,550 |
| 65-74 years | €6,700 |
| Above 75 years | €8,100 |
Residents in Spain – tax rates range from 19% to 47%. EEA non-residents in Spain – a flat rate of 19% is applied to your rental income. Non-EEA non-residents in Spain – if you are not an EEA citizen, you're liable for tax at a flat rate of 24% on your rental income.
- Not Allowing Enough Time. ...
- Not Doing Enough Property Research. ...
- Not Being Financially Prepared. ...
- Not Having the Legal Registrations You Need. ...
- Not Reading the Contract. ...
- Not Researching Property Locations. ...
- Not Budgeting for Future Fees.
No matter what you do in Spain, you will need an NIE number. The thing is that, for many legal procedures like buying a property or opening a bank account, you don't need to be a resident in the country. That is when you will get a non-resident NIE.
You can apply at the nearest national police station in your province that has a foreigner's department and which offers the relevant service or at one of the immigration offices. You may also apply at your nearest Spanish consulate in your home country if not in Spain.
Do I need an NIE to buy property in Spain? There is only one requirement that any foreigner who wants to buy a property in Spain must fulfill: to have an NIE number. This NIE number is the number that identifies you as a foreigner in the country before the different legal institutions and the administration.
Within one month of your arrival in Spain, you must apply for a residence permit and a foreign national identity card. The residence permit is usually issued for a period of 2 years, renewable, provided that you still meet the economic requirements and you have lived at least 183 days in Spain each year.
- Student visa. Validity and renewal of the student visa.
- Business visa.
- Non-lucrative residency visa. ...
- Work permit as an employee of a Spanish company.
- Golden visa.
- Family member of an EU citizen visa.
- Family regrouping visa.
- The arraigo procedure.
Do Spanish residents pay property tax?
In Spain, both tax residents and non-residents are subject to various taxes, including annual property tax (Impuesto sobre Bienes Inmuebles or IBI), capital gains tax, personal income taxes, and non-resident income tax.
Yes a US citizen can retire in Spain. There are many different residency visa options for you in Spain. If you are planning on retiring there then the best visa option would be Residence Visa without the right to work. Once you can support yourself this is the easiest visa to obtain.
Generally, if you are a U.S. person, you are subject to U.S. income tax filing requirements and your worldwide income is subject to U.S. income tax, regardless of where you live. SSA will not withhold tax from your benefits if you are a U.S. person.
If you have Social Security credits in both the United States and Spain, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one country's system, you will get a regular benefit from that country.
You'll need a temporary visa or residency permit to stay in Spain, or any other Schengen country for longer than 90 days. If you're already a citizen or resident of an EU country, you only need to get the local registration certificate—no need to apply for any visa.
If you're not keen on changing your nationality, then you can apply for an “EU long-term residence permit” (permiso de residencia de larga duración) after 5 uninterrupted years in Spain or any EU state. This residence permit grants you the ability to work freely and reap the benefits from the social welfare in Spain.
What is the Beckham Law? The Beckham law in Spain is a special tax regime that enables foreigners who move to the Spanish territory to pay a flat fee of 24% only on the incomes they obtain in Spain instead of a progressive tax on their worldwide incomes (19-45%).
Do I still need to file a U.S. tax return? Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live.
A double treaty agreement is a deal between Spain and a foreign country that aims to help the foreigner in the Spanish territory avoid paying twice the same tax already generated and paid at source.
When a business is organized as a pass-through entity, profits flow directly to the owner or owners. In turn, these are not taxed at the corporate level and again at the personal level. Instead, the owners will pay taxes at their personal rate, but double taxation is avoided.
Are property prices in Spain falling?
House price growth to stall next year
Despite the sharp rise in interest rates and economic uncertainty, Spanish house prices rose by an average of 7.4% in 2022, Eurostat figures show. However, this trend is expected to end in 2023. The favourable tailwind of falling interest rates has reversed over the past year.
The average house price of a home in Spain is $400,000, or $200 per square foot. Real estate prices in Spain in 2023 are steadily appreciating, having increased by 7.3% compared to one year prior.
Property investment in Spain: a very strong return of +11.2%
According to statistics released by the Central Bank of Spain in November 2022, the return expected on the residential Real Estate market in Spain is 11% and 8.4% if you take a mortgage – Green line on the chart. Not a bad property investment in Spain!
If you don't leave Spain after 90 days, you would be in an irregular situation. In other words, you would be in the country illegally. Thus, in the eyes of the immigration law, you would be committing a serious infraction that could result in significant penalties and/or fines.
Once you have reached the 90/180 day limit, you must return to your country of origin. If you wanted to extend your stay in Spain, you would still need to return home to apply for an appropriate visa at your country's Spanish embassy, so that you can come back to Spain and obtain a residence permit for a longer stay.
How Long Can I Stay in Spain if I Own a Property? Even if you own a property in Spain, you're still entitled to stay for only 90 days in a 180-day period without applying for a residence permit or a visa.
- Student visa. Validity and renewal of the student visa.
- Business visa.
- Non-lucrative residency visa. ...
- Work permit as an employee of a Spanish company.
- Golden visa.
- Family member of an EU citizen visa.
- Family regrouping visa.
- The arraigo procedure.
No income tax. Individuals who are domiciled in Arizona even if the person is outside Arizona for a temporary or transitory purpose. Individuals who spend more than nine months of the taxable year within Arizona are presumed to be residents.
If you do not have rental income, only one annual deemed tax return has to be submitted. The deadline is 31 December following the end of each tax year. If you have rental income, the deadline is 1-20 each quarter. Non-resident property owners must file four rental income tax returns each year.
Moreover, non-residents who are also property owners in Spain are legally required to pay taxes on their property, regardless of their non-resident status. In other words, they are legally obliged to pay the taxes derived from the ownership of their property, regardless of whether they are residents or non-residents.
