On 6 April, the deadline for filing your tax returns opened up. Tax residents in Spain have until 30 June to complete this process with the Tax Agency, as paying your taxes and declaring your assets and earnings is obligatory for everyone. If you moved to Spain recently or are thinking about starting a new life here, then read this article where we tell you why it’s important to know about personal income tax – known as IRPF.
This article is a quick guide where you can find out what you’re meant to do and how IRPF affects you when filing your taxes. For more detailed information, we recommend visiting the Tax Agency portal for everything about IRPF and 2021 tax returns.
I’m a foreign national, do I have to file taxes?
The obligation to pay personal income tax, and therefore to file an income tax return, depends on whether you are considered a tax resident in Spain, regardless of your nationality. To determine whether you are a tax resident in Spain, the tax authorities take into account whether you meet any of these requirements (art. 9 Law IRPF):
- Staying in Spain for more than 183 days during the calendar year unless the taxpayer proves their tax residence in another country.
- The centre of economic interests must be in Spain.
- A person is presumed to be a habitual resident in Spain if their spouse (not legally separated) and minor children reside here.
To sum up, the tax residence of a natural person is not only determined on the basis of the first criterion of residence (more than 183 days), but the taxpayer may also be considered tax resident in Spain if they base, directly or indirectly, the main core their activities or economic interests in Spain.
Does it affect my home in Spain?
Have you recently bought a property in Spain and want to know if you can benefit from a tax deduction when filing your tax returns?
You should know that a new feature this year in this area are deductions on works to improve the energy efficiency of dwellings, among which the following stand out:
- 20% deduction on the amounts paid for works that reduce the demand for heating and cooling.
- 40% deduction on the amounts paid for works that reduce the consumption of non-renewable primary energy.
- 60% deduction on the amounts paid for energy renovation works in buildings.
Deductions based on regions in Spain
If you are a tax resident in Spain and you own or rent a property in our country, you should know that there are a series of deductions that you may be able to benefit from when making your 2021 tax return. This will depend not only on your personal situation, but also on where your property is located, as each Autonomous Community offers different tax benefits. In the Valencian Community, where all our developments are located, a series of deductions are applied for the purchase of a primary residence for people under 35 years of age or for taxpayers with two or more descendants. The long list of these deductions can be seen by visiting this link for the Spanish Tax Agency. As each situation is different, we encourage you to find out more about your specific case before making your final tax return, and to consult an advisor or manager if necessary.
We hope this article has helped you to dispel some of the doubts you may have about this annual procedure. Don’t forget to follow our Facebook and Instagram activity and our upcoming blog posts to stay up to date.
Spain is one of the top destinations for European citizens to invest their capital in real estate. In fact, the Costa Blanca, where VAPF developments are found, is an excellent area to acquire a second home. Moreover, you even want to make profit off of this property and rent it out. Whether it’s for the whole year or during the months when you’re no there. Whatever your situation, in this article, you’ll learn about the tax you must pay in Spain to rent out your property as a non-national in Spain.
In addition, if you finally decide to buy your property with VAPF and want to rent it, you might be interested in finding out about some of the exclusive services we offer to our clients. One of those services being that we manage your apartment for rent for the months you’re not using it. You don’t have to worry about anything! Choosing VAPF means choosing peace of mind.
What tax should foreigners pay in Spain?
Once you are familiar with our rental management service, we would also like to give you advice on rental taxation issues. If you are a foreigner and you decide to rent your property in Spain, it is very likely that you will have questions about the tax you will have to pay. Well, the first thing you should know is whether you are a resident for tax purposes in Spain.
Do you live in Spain for more than 183 days a year? Do you work in Spain? Do your spouse or children live in Spain? If you answered yes to any of these three questions, then you should know that you’re a resident for tax purposes in Spain. Now then, as for your particular situation, what tax should you pay? We’ll answer your questions!
What is IRPF and how does it work?
If, after answering the previous, you’re considered a resident for tax purposes in Spain, IRPF (resident personal income tax) is the tax you must pay. This tax is levied on income generated in Spain, either from your professional activity or, in this case, from renting a property.
What is IRNR and how does it work?
On the other hand, if you are not considered to be a resident for tax purposes in Spain, IRNR (non-resident income tax) is the tax you should pay for renting out a property. To be more specific, EU citizens have to pay 24% on their income. If your country of residence is not part of the EU, this percentage is reduced to 19%.
However, remember that those who are considered non-residents for tax purposes in Spain, even if they do not rent out their property, will also have to pay IRNR. In this case, you will pay a maximum of 2% of the property’s cadastral value.
We hope we’ve answered all your questions about tax and renting out a property in Spain. Once again, if you buy with VAPF, you won’t have to worry about any of this. Our team of experts will advise you on fiscal matters both throughout the purchasing process and the rental one too. You can also follow our blog where we have more information on tax issues in Spain.
At VAPF Group, we believe that all children and young people should grow up in a family environment in which they feel protected, and SOS Children’s Villages provides this environment for those who, for different reasons, do not have it.
That’s why, for the second year running, we have collaborated with them. We share their philosophy that all children and young people should have the same opportunities and support their primary mission which is to help to build a better future for those children and young people who find themselves in a vulnerable situation, supporting them as they fully integrate into society.
How do they achieve their mission? Thanks to the donations made by partners, sponsors, donors, and companies – like the one we have made – and to state subsidies. These provide the stability and support that many children and young people need in order to move forward with their lives and have the same opportunities as everyone else.
In 2017, for example, they were able to support 26,633 children and young people and help more than 1,600 families in Spain, and on an international level they came to the aid of over a million victims of war and natural disasters.
SOS Children’s Villages have brought their strategy into line with the Sustainable Development Goals for 2030 through the creation of campaigns such as “All children count, but not all children are counted”, as well as developing partnerships with statistical offices in different countries, since the information they collect is key in developing and improving public policies.
At VAPF Group, we are committed to our Corporate Social Responsibility Plan, which for us is a priority. Within this, child protection is one of our main objectives.
Xavier Pastor is a standout example when it comes to interior design in Alicante and has worked all over Spain. He has been collaborating with VAPF on different projects for over 10 years, customising properties and turning spaces into tailor-made homes for each client.
You have been designing spaces since 1994, what inspired you to start the company?
From a young age I had a connection to the building industry as my father had a glassware shop, we used to help him after school, and that brought me closer to the world of interior design.
In 1985, I moved to Valencia to study. I spent my first year studying in Barreira Art Academy to then move on to and finish my studies in the Genaro Lahuerta School of Arts and Crafts.
From 1989 to 1992, I started my first architecture and design company together with three partners, then in 1994 I moved to Dénia and started my own project.
What is designing a space according to Xavier Pastor?
Creating a style and finding what’s essential for conveying something is necessary, but there is something more, which is our real objective: we have to provoke feelings.
I like to visit venues which have a prominent design, and I love seeing projects by our team which still create a reaction 20 years later.
What is the most ambitious project you have taken on?
Because of the amount of work and the time dedicated to it, Suitopía Hotel in Calpe. This was a project we worked on for two years, designing every room in the building.
How did you get to know and start working with Grupo VAPF?
Grupo VAPF is a standout company in the area, and although I had heard of them, we didn’t get the chance to work together until a client and friend recommended us to each other.
How many years have you been working with Grupo VAPF for? Which was the first house you designed for them?
We have been collaborating on different real estate projects, as well as the redesign of their central offices, for over 10 years.
Our first collaboration was on the Magnolias sector in Cumbre del Sol. This was a project to design single-family homes for the end client with many variables, which made it a highly appealing challenge.
You have designed numerous houses for Grupo VAPF (one home in the Jazmines sector, another in Magnolias for Life, and Villa Moraira), as well as their offices, but which is your favourite project?
We have a special bond with all the projects we work on, but Ocean Suites Altea was a project that, as far as I’m concerned, gave us optimum results on both a design and functional level, with a contemporary and distinguished style.
Ocean Suites Altea
What is your inspiration when you design houses for Grupo VAPF – the location, the views, the sea, the surrounding nature, the owners…?
Inspiration is part of the creative process, in which the client’s preferences; the natural surroundings and the sea views; and the materials we work with, play a key role.
We are very proud to personalise projects for Grupo VAPF according to the tastes of each client. In this way, we are able to make sure that the final result is a true custom-made home.
This great variation in our interior design projects can be seen through the homes we have collaborated on and is something which sets us apart as an interior design team.
When you design a house for Grupo VAPF, do you design both the interior and exterior spaces?
We mainly work on interior spaces, although on some projects we also collaborate on developing the outdoor space.
If Grupo VAPF’s clients request a personalised design, can you do it?
Personalising designs is what we do, this is our end goal.
Have your designs changed over the years from the first houses to the most recent? In what way?
Without doubt, time and experience have given us a different approach which helps us to vary our design, this is evolution and it’s essential.
However, what hasn’t changed is the way we work and the way we treat our clients, which for us have been fundamental from the very beginning.
What is your next project with Grupo VAPF?
We are currently working on the new design for Blue Infinity, a project which once again we are reinventing and working on with great enthusiasm.
What do you like most about working with Grupo VAPF?
Grupo VAPF is a very important client for us and together we have developed the design of properties over the last 10 years, managing to create spaces which make us stand out. However, without doubt, what I value most is the friendly manner of the team, something which has made us feel like part of the company.
Would you like to live in a home which makes your life easier, safer, and more comfortable?
The houses made by VAPF Group offer the advantages of home automation, integrating technology into the houses’ intelligent design. An automated system means that daily tasks are made much simpler, letting you enjoy your luxury home on the Costa Blanca while saving both energy and money.
VAPF Group’s luxury houses include the integration of an intelligent home automation system based on the international KNX standard, with first-class products, brands, and manufacturers. This home automation focuses on four different areas: comfort, energy saving, technical and personal safety, and communication.
The home automation in VAPF houses is very easy to use. It can be controlled using mobile phone applications on smartphones and tablets (iOS or Android) and managed both inside and outside the house to offer maximum control at all times. The services are managed using switches, home automation keypads, a touch screen on the wall, a wireless remote control with a screen, any computer connected to the property’s network, or a phone.
One advantage is being able to control thermostats for heating and air conditioning, which enable you to alter the temperature of each room in the house individually. In this way, you can achieve maximum comfort even on the very hottest summer days.
With lighting services, you can make the most of the hours of natural sunlight through a power regulation system in the entrance hall, lounge, dining room, and bedrooms, and the rest of the rooms have an ON/OFF lighting system incorporated into the home automation system.
Security is excellent in these homes, and consists of a central alarm, a control keyboard, presence sensors, flood sensors in the bathrooms and the kitchen, and fire detectors. These are all connected to the central alarm so that you can live with full peace of mind in your new home. And, if you’re expecting a visit, the house has an electronic intercom integrated into the home automation system, meaning that you can forward calls from the intercom to landlines or mobile phones. The range of home automation systems increases every day, offering higher quality products that are even easier to use.
If you want to live in one of our intelligent luxury homes, don’t hesitate to ask for more information by filling in our contact form. We will be happy to help!
At VAPF Group, we believe that the energy efficiency of a home is very important as it offers many benefits both for the inhabitants and for the environment. For this reason, we work to ensure that our current developments are as energy efficient as possible.
If a home has a high energy efficiency, it means that it has good quality air inside and is synonymous with a greater level of comfort. Furthermore, energy efficiency also leads to savings on energy bills. The closer an energy rating is to A, the more efficient it is.
At VAPF Group we know that living in a house with a high energy efficiency rating means moving forward to the future and gaining comfort. That’s why all of our developments have an A or B energy efficiency rating. For example, Blue Infinity, Villa Ibiza, and Lirios Sunrise, our main developments at Cumbre del Sol, all have an energy efficiency rating of A – the maximum rating that can be achieved.
Blue Infinity Apartments
One of the ways in which we make sure that the homes in our developments have a high energy efficiency rating is by using the Altherma system by Daikin, which we include in all of our builds. Thanks to this system, we extract energy from the outside air which we then use to obtain heating, air conditioning, and domestic hot water. In this way, we make sure that between 66 to 80% of the energy used in our houses comes from outdoor air. It is an efficient system. For example, to generate 3 to 5kW of heat, only 1kW of electricity is needed.
If you want to live in a house on the Costa Blanca with all the comfort a luxury home can offer, a high energy efficiency rating, and incredible sea views, don’t hesitate to fill in our contact form for more information!