The Art of Living

A Life Full Of Art

Gallery RED offers clients an amazing selection of exclusive artwork.

The gallery showcases a combination of the most sought-after contemporary and emerging artists throughout the world. Some of these renowned artists include Andy Warhol, Basquiat, Gerhard Richter and Damien Hirst, among many others.

From One Mallorca we pay tribute to art, design and exclusivity with Gallery Red. galleryred.com

Annual Taxes

Wealth Tax

The wealth tax in Spain, also known as “Impuesto de Patrimonio”, is a tax that both residents and non-residents must pay on their assets. It is a tax that must be paid yearly on top of other taxes like VAT or withholding tax. So this is always something important to consider when buying a property in Spain, particularly high-end properties.

Currently, the Balearic Islands have specific wealth tax rates, varying between 0.28-3.45% based on the highest value between purchase price, cadastral value or value fixed by tax authorities. The tax is regulated and there is a minimum exception per person set at €800,000 for residents and €700,000 for non-residents. When a mortgage is in place at the time of completion, it is deductible for wealth tax purposes and is therefore beneficial, especially in the high-end properties.

Deadline: Wealth tax returns are due on June 30th for assets held in the previous financial year.

IBI - LOCAL PROPERTY TAX

Every property owner in Spain, whether or not they are resident, must pay Local Property Tax (IBI). This property tax is a municipal tax, with a specific amount calculated by the local Town Hall of the municipality of your property.

This property tax varies from 0.4% to 1.1% depending on the area and based on the cadastral value of the property, determined by the municipal government, which is usually much lower than the market value of the property. The cadastral value appears on receipts of your IBI tax payments.

Deadline: Payment of IBI depends on the municipality, although it’s normally paid in OctoberNovember.

Tax On Waste Disposal

This local tax is applied for garbage, solid waste, and sewage municipal services and is paid annually. Every location has its specific rates and the deadline for payment also varies according to each area.

Both, local Property Tax and Tax on Waste Disposal should be paid through recurring bank debit payment so that the Town Hall charges them automatically without prior notice of payment to the owner.

Deadline: The payment deadline varies according to the municipality.

IRNR - STATE INCOME TAX ASSOCIATED WITH TENANCY OF THE PROPERTY

If you are considering letting your home, you will be liable to pay IRNR (Impuesto sobre la Renta de No Residentes). It is a national tax on the income you receive from letting a property. As a result, you should declare your income and submit the tax return annually. IRNR is applicable for both residents and non-residents.

If you own a property for personal use and do not let it, you must submit the return. If the property is rented for income, you must submit an income tax return. Currently, the tax is calculated at 2% of the cadastral value or 1.1 % (for properties with a cadastral value revised after January, 1st 1994) and then 19% of this number (24% if you are not an EEA citizen).

Expenses that you may deduct from your rental income include mortgage interest, costs associated with the purchase of the property, e.g. transfer tax and legal fees, non-national taxes, property maintenance and repair costs, community fees, property insurance fees, utility costs, and marketing expenses to promote your property.

Deadline: An annual tax declaration has to be presented by December 31st of the relevant tax year.