Who is considered a non-resident? For whom is non-resident tax an issue? What taxes must be paid? These questions are always on our clients’ minds, so we would like to give you a brief overview below.
Resident
As one of Europe’s most popular holiday destinations, Mallorca attracts millions of tourists from all over the world every year. Some choose to stay on the island for a longer period of time. This decision goes hand in hand with either buying a property or renting a flat.
Anyone who lives in Mallorca for more than 183 days must register as a resident on the island and has corresponding rights and obligations.
Non-Resident
Non-resident are people who spend no more than 183 days a year on Mallorca. This definition is independent of owning a property or renting a flat for e.g. a whole year.
Non-Resident Tax
Non-resident tax is an issue when it comes to the purchase or sale of a property on Mallorca. Depending on the situation, different taxes may apply, such as land transfer tax, capital gains tax or legal transaction tax.
It is important to note that there are different taxes to be paid when acquiring a property than when selling a property. We strongly recommend contacting a tax advisor or Gestoria. The second is a kind of service office that takes care of administrative matters for you and supports you in tax matters.
Property Purchase And Non-Resident Tax
Depending on the constellation, the following taxes apply:
- Land transfer tax
- Value added tax
- Notarisation or stamp tax
- Gift tax when the property is donated
- Inheritance tax when inheriting the property
The basis of calculation and the tax rates change continuously. Therefore, it is important to obtain the current data or information from a specialist on Mallorca. We are happy to support you with our island-wide network in your search for a suitable tax advisor.
Non-resident Tax On Property Sale
If the property is sold, the following taxes may apply once:
- Income tax on the capital gain
- Capital gains tax (plusvalia)
- 3 % withholding tax (payment to the Spanish tax office: part of the expected profit tax)
Annual Non-Resident Tax For Property Ownership
If you own a property on Mallorca as a non-resident, you will also have to pay the usual annual taxes. These are property tax, income tax (IRPF) for owner-occupation of the property, income tax for rental and tax on assets (less tax-free allowance).
We would be happy to offer you support on this topic and put you in touch with a trusted tax advisor. We look forward to hearing from you. You can reach us at: info@wackershauser-immo.com or +49 176 1970 8211.
