A RESIDENT IN SPAIN ASKS: COULD I BE EXEMPT FROM PAYING ANNUAL TAXES?

Numerous residents will remember that since they first bought their residence in Spain, they were advised to submit annual tax declarations. Most have dutifully paid these taxes, which were seemingly due for years. If you are one of the lucky few who had received correct advice, you will be aware that you do not in fact due to pay these duties. Those who have been paying resident tax should make a thorough investigation on the matter.

The general rule is that, pensioners, whose Spanish homes are their habitual and only abode, earn a pension not exceeding approximately twenty thousand euros a year and have no savings should be exempt. There are of course exclusions to this rule. One of these exceptions appears to be treating some pensioner’s unfairly. If your pension for example; does not exceed fifteen thousand a year but is obtained from two sources you will be liable to pay the annual resident tax.

I suggest that you do not use the above as a general rule as each person’s circumstances differ. For pensioners especially it is important that if you have not done so, that you should complete and submit one tax declaration to see if you are exempt. If this is the case, make sure you obtain a certificate from your tax office stating that you are a tax resident. Not doing so will complicate matters when either selling your property or on the death of a spouse. The regional government will retain funds on the sale of your property or charge a higher percentage of inheritance tax on the demise of a partner.