How Brexit has affected homeowners in Spain, in a non-resident situation.
Since the entry into force of the separation of the United Kingdom from the European Union, there have been numerous variations in the personal, administrative, and fiscal treatment of British nationals with properties in Spain.
As it could not be otherwise, the treatment that has been most differentiated with respect to tax aspects is for the purposes of Income tax for non-residents in Spain – Impuesto de la Renta de las Personas Físicas No Residentes – Tax Model 210.
As we can see in the tax calculator that you will find at the end of this report, there is an important variation both in the tax rate to be paid for the income obtained in Spain, and in its consideration for the purposes of deductions, tax credits , etc..
The tax treatment of British nationals not resident in Spain before the United Kingdom left the European Union was based on the following fundamental aspects:
-Real estate income obtained through a property in Spain was subject to a 19% tax.
-In addition, in the case of rental income, British nationals were allowed to reduce the tax through a series of rebates and reductions that, especially related to rental expenses, resulted in a significant improvement in the situation investment tax.
However, after the departure of the United Kingdom from the European Union, the assimilation of the United Kingdom as a non-European Union country has taken place, with which, as we will see in the calculator at the end of this article, the fundamental differences are the following taxes for British non fiscal residents:
-The income obtained in Spain through a Spanish property passed from paying tax at 19 %, and start paying taxes at 24 %.
-The rental income obtained through a property in Spain are not subjected to any reduction, or discount, of operating expenses such as cleaning, home insurance, repairs, reforms, etc., as if they were contemplated in the case nationals or residents of European Union countries.
Therefore, if previously there were concepts that could deduct the Spanish non-resident tax, such as cleaning the pool, payments to the community of owners, repairs made in the apartment, home insurance, etc., at this time it is not possible to make this type of deductions or access the tax credits that the countries of the European Union do find in the Spanish tax system.
It must also be said that British residents who, either prior to the departure of the United Kingdom from the European Union through the Brexit mechanism, or those who have subsequently obtained tax residence, absolutely no type of variation in its tax treatment.
This is so because Spanish tax residents, by their very nature, are subject to a homogeneous and general treatment together with the rest of the Spanish nationals, therefore, the exit of the United Kingdom from the European Union through the mechanism of the Brexit has not generated any change in this regard.
In order to visualize exactly the quantitative difference both in the case of being part of European Union countries, and, as is the case, of non-residents, we kindly invite you to fill in the calculator forms that helps to discover how the Spanish tax system works for the British after Brexit, in a situation of non-residents.
You can calculate also your taxes as Spanish Tax residents INCOME TAX RESIDENTS and others from our Calculator’s section as per clicking below: