In the Income statement, the taxpayer must include all the income for the year for which it is taxed –in 2023 the declaration of the previous year is presented-. This affects income from work, economic activities, movable capital, real estate or capital gains.
They are not always benefits or income, The Treasury also obliges the taxpayer to pay taxes for their assetsincluding their homes. The tax treatment of homes will vary according to the use that the taxpayer makes of it: habitual residence, second residence or for rent.
The habitual residence does not pay income taxalthough it will have to be declared and there is only a deduction for purchases made before 2013. The Tax Agency considers habitual residence to be one that “constitutes the taxpayer’s residence for a continuous period of at least three years” or “that the taxpayer inhabits effectively and permanently, within a period not exceeding twelve months from the date of acquisition or completion of the works.
Allocation of real estate income
The denomination they make from the Treasury is important because, if it is not the habitual residence, the tax treatment is different. Specific, the second residence is included in the general tax base as real estate income.
In this box, the Tax Agency includes all income “for being the owner or holder of a real right to enjoy real estate, including time-share accommodation.” The taxation that the Treasury applies is 2% on the cadastral value of the property that appears on the IBI receipt.
Nevertheless, 1.1% of the cadastral value is applied when the value of the property has not been reviewed in the last 10 years or when the property does not have a defined cadastral value. In the latter case, the value to apply the 1.1% will be half the purchase value of the home or the value of the property verified by the Administration for the purposes of other taxes.
Affects the owner or the usufructuary
This taxation will be included in the income statement of the owner of the property, as long as you have it at your disposal all or part of the year. It will not correspond to the owner to include any amount by way of imputation of real estate income, when there is a usufructuary or an owner with the right of enjoyment. In that case, it will be usufructuary who must include the existence of the home in his statement. The Tax Agency indicates that it will do so “in the same amount that would correspond to the owner”.
In addition, if the taxpayer is the holder of a timeshare accommodation right, he has the obligation to include in the declaration the imputed real estate income according to the duration of his accommodation. In this case, the Treasury establishes the exemption when the period of use of the home is less than two weeks a year.
If the property or the rights over it fall on more than one person, all holders must declare as real estate income the amount that results from applying to the total income imputed to the property or right, the percentage that represents its participation in the ownership thereof.
no economic activity
The Ministry of Finance establishes the imputation of real estate income conditioned to a series of requirements that the properties must meet for which it is taxed. Thus, real estate income tax will be applied as long as the home is not for the purposes of economic activities; It is not an essential property for the development of agricultural, forestry or livestock operations; do not generate capital returns -for example, a rent-; or homes that are not usable.
