What is RENTA?
RENTA is the Spanish term for personal income tax, which is the comprehensive term for Impuesto sobre la Renta de las Personas Físicas (IRPF or RENTA for short). The Spanish tax law requires anyone living in Spain, regardless of their nationality, to declare and pay RENTA.
Related article:Criteria for individuals to be considered tax residents
Do you have to declare RENTA after buying a property in Spain?
The RENTA tax is specific to each person’s income and the law states that the higher the income, the higher the tax payable. On the contrary, for people with low incomes there is usually no tax to pay or even to declare. For example, the Personal Income Tax Act states that those employment earning up to €22,000 per year are exempt from filing a RENTA return.
Buying a house in Spain is actually an expense, not an income, and therefore you do not have to pay personal income tax on a house in Spain.
Filing a return does not mean that you have to pay tax. The declaration is only a report of income to the government. Whether or not you have to pay tax and how much depends on many factors, such as the number of family members, etc.
Note: If you are required to file a RENTA return, you will have to indicate all your real estate.
I have a mortgage on my house, do I have to declare it?
As mentioned above, a loan is actually a debt, not income. Therefore it is not relevant whether or not to declare RENTA. It used to be a tax deduction that has been abolished, so it doesn’t make any difference.
