Taxation for Swedish Property Owners with Second Residences in Spain

In this blog post, you will find more information about the various taxes for a Swedish resident on the ownership of a second home in Spain.

Taxes on a Property in Spain

In Spain, you need to consider three different taxes on the ownership of real estate.

1. ‘IBI’ (Impuesto sobre Bienes Inmuebles) is an annual municipal tax on real estate ownership. This tax is based on the cadastral value of your property, the number of square meters and the specific rules of the municipality. For example, if you have a two-bedroom apartment in Marbella, expect an annual tax of around 800 – 1200 euros. If you have the some two-bedroom apartment in Orihuela Costa, the IBI might be around 350 – 450 euros.
2. ‘Basura’ is a municipal fee for waste collection. Generally, this tax amounts to 150 euros per year.
3. The tax for non-residents, ‘Impuesto sobre la Renta de no Residentes‘ (IRNR): as a non-resident in Spain, you also pay a national tax on your property. If you don’t let your property, the tax is based on the cadastral value. Specifically, you take 2% or 1.1% (depending on whether the cadastral values in the municipality have been revised in the last 10 years) of the cadastral value. On this amount, you apply a rate of 19%. If you do let, you pay 19% on the rental income minus the costs incurred during the rental period.

Read more about the Spanish taxes for non-residents.

Additionally, there is a wealth tax in Spain if you, as an individual, own more than 700,000 euros in net assets in Spain. However, the wealth tax has been abolished in Madrid and Andalusia. Finally, there is a solidarity tax if you, as a non-resident, have more than 3,000,000 euros in net assets in Spain.

Taxes on Foreign Property Ownership in Sweden

In Sweden, you pay taxes on rental income under the category ‘inkomstslaget kapital‘ even if the property is located in Spain. There is a standard deduction of SEK 40,000. Depending on the type of property, you can have additional reductions for costs. The tax rate is in principle 30%.

Double Taxation Agreement

According to the double taxation agreement between Spain and Sweden, Sweden provides a tax credit. This means that you can deduct the taxes paid as a non-resident in Spain from the taxes payable in Sweden. The Spanish IBI cannot be deducted.

If you have any questions about purchasing a property in Spain, feel free to contact us.