JON W. OLSEN
REAL ESTATE -INMOBILIARIA

Regardless of whether or not the real-estate property is leased out, income from said property shall be subject to income tax. However, the tax treatment varies depending on whether or not the property is leased. Non-resident taxpayers who own urban property that is used by the owner but not for economic activities, that is transferred free of charge or is unoccupied shall be liable to pay income tax. The tax is based on the estimated income of 1.1% of the property's cadastral value (or 2% if the cadastral value has not been subject to revision or modification since 1 January 1994) and the applicable tax rate is 24%.

The full amount received from the lessee for all purposes shall be taken into account. Said amount shall include, where applicable, any assets leased with the property, but shall exclude VAT and no deductions of expenses shall be made. Non-resident property owners whose assets that are taxable in Spain consist exclusively of one home may file a joint tax return (form 214) pertaining to both the wealth tax (Impuesto sobre el patrimonio), corresponding to the ownership of said home, and the income tax (IRNR) from the income attributable corresponding to the ownership of said home. This tax return may be filed during the calendar year following the year to which the return refers.

Each physical person must submit an individual declaration. Therefore, if a building is the property
of a married couple or several people, each one of them should submit a declaration. We are happy to prepare, present and pay the necessary tax declarations for the above. To do so, we need copies of your purchase deed (Escritura), the Council Tax receipt and your NIF-number. If there is a mortgage registered in the property in Spain, we also need the year end balance of this.