Do you know how to declare your share in the sale of undivided garages and storerooms for Non-Resident Income Tax in Spain?

The general rule in administrative settlements of Spanish Non-Resident Income Tax (IRNR) is that as many separate self-assessments must be made as there are cadastral references. However, there are cases in which, under a single cadastral reference, different properties are identified, in accordance with the regulations that apply to the Spanish Real Estate Registry and, in this case, it has recently been determined that different Spanish Non-Resident Income Tax self-assessments should not be filed in accordance with the number of cadastral references, but rather with the number of properties transferred, but according to the number of real estate transferred, with real estate also being understood to include the undivided shares in garages and storage rooms, in accordance with the Consolidated Text of the Law on Real Estate Cadastre and Royal Decree 417/2006.

This approach is in line with the Spanish Non-Resident Income Tax regulations themselves, and with Order EHA/3316/2010, since this order does not actually establish a specific tax concept of “real estate”, but rather speaks of “income derived from the transfer of real estate that will be declared separately, with each accrual of income”.

How should the sale of undivided garages and storage rooms with a dwelling be declared for Spanish non-resident income tax purposes?

In practice, both the Spanish Non-Resident Income Tax (IRNR) regulations and the regulations for filing the self-assessment of Spanish Non-Resident Income Tax (Form 210 IRNR Spain) allow the grouping of income and, at the same time, exclude transfers of real estate for which a self-assessment has to be filed for each transfer of real estate.

However, if you sell a parking space and a storage room that do not have a different cadastral reference than the house, but have a different registration in the Spanish Land Registry and therefore three self-assessments have been submitted, you are doing the right thing if you submit three separate self-assessments:

  • one self-assessment for the joint disposal of the house and the garage and storage room, and
  • two subsequent individualised self-assessments for the garage and storage room, in which the same cadastral reference is included.
The sale of a garage and storage room in joint ownership with a house is a special case for Non-Resident Income Tax in Spain, and the Spanish Economic Administrative Court has interpreted that a single joint declaration must be made, and not individually for each property as in the general case of Non-Resident Income Tax, since in this case the three properties (house, garage and storage room) have the same cadastral reference number.

The sale of undivided garages and storerooms with a dwelling is a special case for Non-Resident Income Tax in Spain, and the Spanish Economic Administrative Court has interpreted that a single joint declaration must be made, and not individually for each property as in the general case of Non-Resident Income Tax, since in this case the three properties (house, garage and storage room) have the same cadastral reference number.

Although it is not the usual practice, there are Communities of Neighbours in which the additional elements to the dwelling (garages and storage rooms) cannot be sold individually, but through the purchase of undivided shares of a part of the surface area of the garage or storage rooms, which, however, also determine that they are considered as independent properties for cadastral purposes.

In short:

The Spanish Economic-Administrative Court considers that when the cadastral reference is unique (without the registry entry being unique), the presentation of a single self-assessment (aggregated) for the taxation of the capital gain of several properties is exonerated from liability for tax infringement because a “reasonable interpretation of the rule” is being made: that you understand that as your three properties (home, garage and storage room) have the same cadastral reference, you can file a single self-assessment for Spanish Non-Resident Income Tax to be taxed on your capital gain.

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