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THE GOOD NEWS TAXES COME DOWN IN SPAIN
The socialist government of Sr. Rodriguez Zapatero has put a proposal before the Spanish parliament which, if approved, could reduce substantially the tax burden currently suffered by non-resident property owners, who rent out their Spanish properties.
The current rules, in force for nearly 20 years, have long been seen as a discriminatory situation, whereby the resident landlord was able to deduct related expenses and costs from the gross rental, in calculating the tax payable, but not so for the non resident.
This measure once approved will be applicable to EU citizens and companies only, under the current proposals. The European Commission has been pressing Spain to remove this discriminatory system for quite some time.
The proposals include a strict interpretation of what are considered “directly related expenses”.
It is likely that these changes will not come into force until the end of this year.
Maria Lima
Tax Partner
ASEC Group
