I have recently finished my mortgage on a flat in Madrid. I am UK based and aim to spend as much time there in a few years when I am retired as the 90/180 post Brexit rule will allow. In the meantime, I am thinking of renting the place out for the next few years until I retire here in the UK (maximum 6 years). I am a UK resident for all purposes and have never had nor want resident status in Spain. To start the ball rolling, first question is, I suppose, is where do I stand as regards tax? I am assuming I am obliged to pay UK income tax to HMRC, in the same way that I would be if I were to rent property in the UK? How on the ball are the tax authorities regards this in the UK? Are there any financial considerations regards Spain? I do have a tenant in mind who is a friend, so it won't be rented out via an agency etc. Anyhow, I am at the very early stages of investigating things and would welcome any advice or guidance. Many thanks.

You will usually pay tax in Spain on the income as a non resident (24%) with no taxable deductions. It’s pretty easy to do, I have an accountant in Spain who does everything for me and I pay the tax quarterly.

Have you previously been paying tax on the property whilst unrented as a non res ?

No. Truth be told, I didn't know I had to. This was mentioned in an earlier thread about a what happens when you finish your mortgage. I have only finished the mortgage in the last few months. I am a frequent visitor (about 10 times a year). Had the place for about 7 years (with a mortgage). I have been paying the equivalent of council tax to Madrid City Council.

Ouch - you should have been paying non-resident (second home) tax on the property. Look up "modelo 210" which has to be submitted every year by 21st December

Oops! As above, no tax will be due in the UK on your rental income in Spain, but you'll need to sort out your tax affairs in Spain asap. Far better to 'fess up and get it sorted amicably than be caught and face big penalties because they think you've avoided tax on purpose.

Good luck.

Will do. How much is it? Calculated on the value of the flat, I suppose?

That will be down to UK tax authorities to decide, but agree, most likely tax from property rent will be nil.
Regardless, OP has to submit UK tax returns for 2023-24 in Jan 2025 (presuming he rents before April 6th this year), declaring rental income from ES.

Before B'day Uk citizens paid 19% of 1.1% of the Cadastral value (not what you paid, or what its worth) but the value they use for the IBI.. * 1.1% is what my son pays but we are in the Alicante area. Yours wont be much different... Its pennies really and you should have been advised about this when you purchased.

Anyway since 01/01/2021 you pay 24% of 1.1% so still pennies (unless you own a million plus house)..

So for a property of €100,000 you would have paid €209 for the 4 years before B'day
For the three years since... €264.
Obviously your figure will be more/less than this....

Dont know how old this is but here are the details.
https://theonestopproblemshop.com/fi...spanish-taxes/

Find yourself a local Gestor and talk to them, they can sort this.

It is not a big deal. It is worked out on the castral value which is much lower than any market price and it only a few percent if that. Any fine will be tiny - but good just to sort it out. Your gestor can do it for you.

AS a general rule tax treaties usually include a clause where any taxes etc due on property or income from property the country where the property is usually has first dibs at collecting the tax.So you have to pay up in Spain then you will still have to declare any income in the UK who give you an allowance to offset any tax on the rent paid in Spain.For mere mortals this will mean no tax is generally payable on the spanish rental income.

Really useful information above. Thanks to all who posted. Regards the tax I should have been paying over the last few years, I have found the valor catastral from the escritura compra-venta from when I bought the place. I know ignorance is no defence and all that but I didn't know about this tax. The flat is in a barrio in Madrid where there are no other British ex-pats. If you are in an area of Spain where there are a lot of British people with property you tend to be more clued up on these things as you have lots of contact with fellow countrymen and women. I'll do the right thing and pay what is due. I would be the first to criticise anyone foreign who didn't pay their way in the UK, so it's only fair. I'll sort it out and cough up when I am next over there. Thanks for the information. This forum is a mine of information. All the best for 2024.