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Property Tax Consultant in Palma, Mallorca

Get expert’s guidance to navigate your complex property tax laws from Legal Management and ensure to optimize your tax liabilities and compliance strategies.

If you’re looking for guidance on Spain’s complex property tax laws, our expert team of property tax consultants in Palma de Mallorca, Spain is here to help. At Legal Management, we specialize in helping property owners optimize their tax liabilities while ensuring full compliance with Spanish property tax laws. Whether you’re purchasing, owning, renting, or selling property in Spain, we provide expert advice to minimize your tax burden and avoid penalties.

Key Insights on Property Taxes in Spain

Spain imposes several property taxes that affect owners at different stages of property ownership. From the purchase and ownership phases to rental income and property sales, the tax landscape can be complex. Our property tax consultants provide valuable insights to ensure you’re paying taxes correctly and using tax-saving strategies to your advantage.

 

1. Understanding the Running Costs of Property in Spain

When purchasing property in Spain, especially as a non-resident, it’s important to consider the running costs, including property taxes in Spain. For example, let’s take a client who owns a property valued between €1.2 and €1.3 million:

  • Property Tax (IBI): Property owners must pay this tax annually, which varies depending on the property’s location. In our case, the cadastral value of the property is €165,000, and the annual property tax is €900 (0.55%).
  • Wealth Tax: Non-residents are required to pay wealth tax on their Spanish assets. The calculation is based on the cadastral value of the property, multiplied by 1.1%/2% and then by 0.19. This client pays around €627 in wealth tax annually.
  • Shared Housing Costs (Cuota de Comunidad): Many properties in Spain are part of communal living spaces. This client incurs maintenance costs of €200 per month, bringing the total running costs to approximately €4,000 annually, not including utilities.

These costs should be factored in when considering the financial implications of owning property in Spain.

2. Taxes Associated with Property Ownership

Property ownership in Spain is subject to several important taxes, including:

  • Property Tax (IBI): The property tax, which varies by region, is calculated based on the cadastral value and can range from 0.4% to 1.3%. For example, a property valued at €1.2 million might incur an IBI tax of around €900 annually.
  • Wealth Tax: Non-residents are subject to wealth tax, which is calculated in the same way as mentioned above.
  • Property Transfer Tax (ITP): When buying property, you must pay property transfer tax based on the price of the property. For a €1.2 million property, this could amount to as much as €112,000.
  • Rental Income Tax: If you rent out property, non-residents must pay a fixed tax rate of 19% on rental income, with additional taxes potentially owed in the country of residence.
  • Speculation Tax on Property Sales: Regardless of how long you’ve owned the property, Spain imposes a speculation tax of 19% on any capital gains from the sale of property.

Having an expert property tax consultant can help ensure you’re paying the correct amounts and minimizing unnecessary tax payments.

Why Hire a Property Tax Consultant in Mallorca, Spain?

Spain’s property tax system can be confusing, particularly for non-residents. A property tax consultant in Palma de Mallorca, Spain can provide you with expert advice, helping you manage your tax liabilities, avoid penalties, and ensure compliance. Whether it’s navigating IBI, wealth tax, or property transfer tax, our team is here to guide you every step of the way.