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What taxes are paid annually on a property?
Tax Law
Francisco Garcia Ramirez
30th of April 2000
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Q. I am considering buying property in Spain. You mention two annual taxes, (plus community charges, where applicable). Are the "contribuciones" part of the local IBI taxes? Also, do you have any idea when they will abolish the Property Income Tax (Renta) and is it just to be replaced by some other tax?
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A. Indeed, "contribuciones" is the old name for the IBI tax. It is still widely used, specially by elder people, and they are the equivalent to council rates paid in other countries.
With regards to Property Income Tax, there have been rumours concerning its abolishment, to equate it to the current situation of the residents for tax purposes, who pay this tax only in specific circumstances.
Residents for tax purposes pay Property Wealth Tax, whilst a non resident will pay Property Income and Wealth Tax. A resident also enjoys more deductions to offset against property wealth tax than a non resident for tax purposes.
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