Those non-resident owners in Fuerteventura, who receive income from vacation home rental, that they have obtained capital gain from the sale of a property, or have it as personal use, they have to pay taxes, such as the Non-Resident Income Tax, the Property Tax and, in some cases, the Canary Islands Indirect General Tax (IGIC).
Let’s see each of the situations and the taxes that are derived:
Non-Resident Income Tax (IRNR)
The non-resident taxpayer who owns an urban property located in Fuerteventura must pay the Non-Resident Income Tax, the IRNR, which is a direct tax levied on income obtained in Spanish territory by non-resident individuals and entities in this .
We can differentiate these situations:
- Property located in Fuerteventura, rented by a non-resident owner. The non-resident owner must pay taxes on the rental income obtained quarterly and pay the IRNR fee. The return to declare is the amount resulting from applying, it is the full amount received from the lessee, without deducting any expenses. The taxation period is quarterly in the case of self-assessments with a result to be paid, or annually in the case of self-assessments with a zero fee or with a result to be returned.
- Property located in Fuerteventura for personal use by the non-resident owner. As it is not your habitual residence, just as it is taxed in Personal Income Tax (IRPF), you will have to pay income imports (1.1% or 2% of the cadastral value of the property) and enter the IRNR quota, with model 210, for the declaration of Income Tax for Non-Residents without a permanent establishment, for annual presentation.
- Sale of the property located in Fuerteventura by a non-resident owner. The property transfer operation will generate a profit or a loss depending on the acquisition and transfer value that will have to be declared through the corresponding Model 210. In this case, the term for the presentation of the aforementioned Model will be 3 months once a month has elapsed from the date of transmission of the property.
Failure to declare the aforementioned tax obligations may lead to the imposition of sanctions by the Tax Agency.
Remember that non-resident taxpayers in Fuerteventura will have to present the IRNR if they have obtained income in Fuerteventura for the income from their real estate on the island.
Real Estate Tax
If the owner is a non-resident and does not rent the home, the yield to be declared is the amount resulting from applying to the cadastral value of the property, which appears on the Real Estate Tax (IBI) receipt, the following percentages established by the town hall where the house is located, since it is a local tax.
This return is understood to be accrued once a year, on December 31.
The proportional part of said amount will be declared if the property has not been owned throughout the year or if it has been leased for some period of time. Form 210 must be presented.
The full amount of the tax is the result of applying the tax rate to the tax base.
The tax rate is established annually in each municipality; in the case of La Oliva, it is 0.59% in the case of urban goods and 0.3% in the case of rural goods. For other municipalities, such as Antigua, Puerto del Rosario, Tuineje, contact us, since each municipality establishes different rates, discounts and exemptions.
The taxpayer can take advantage of the 50% discount, the so-called solar IBI, with a maximum of 6,000 euros for 3 years, for those who install solar panels in their homes.
This tax is paid if the value of the estate is greater than €700,000.- This tax is 0.2% of the value indicated in the deed or the cadastral value, if this is greater than the value of the purchase.
If after the purchase, the tax authorities have made a value check, the highest of these 3 values (deed, cadastral, purchase value) is always applied.
Canary Islands Indirect General Tax
The IGIC must be processed when there is income from rental of housing in Fuerteventura, determined in a payment of 7% to the Government of the Canary Islands, through the 420 model.
There is an exception, if the property is rented residentially, for periods of more than 90 days and to people with Spanish residence, since IGIC does not have to be paid.