Do loans between private individuals have to be declared?

Question

José Manuel Alburquerque · Accepted Answer

Yes, although normally nothing has to be paid. The loan is subject to the “impuesto de transmisiones patrimoniales”, the Spanish property transfer tax, but is exempt. Even so, the person receiving the money must file it. In Catalonia it is filed with the “Agència Tributària de Catalunya”, the Catalan tax authority, using Form 600, within one month of signing. In the income tax return, the lender must declare any interest received and, if the loan is interest-free, the tax authorities presume that there is interest unless it is proved that the loan is free of interest. Property transfer tax The law governing this tax, which is a national tax, includes loans among the transactions it taxes and at the same time declares them exempt, whatever form they take. Being exempt does not mean that nothing has to be filed. The law requires the document to be filed by the person who would be the taxpayer, who in a loan is the person receiving the money. In Catalonia it is done as follows: The Form 600 self-assessment is filed with the Catalan tax authority, together with the contract, stating that the loan is exempt. The time limit is one month from the signing of the contract, the same as for the purchase of a flat. Nothing has to be paid in respect of this tax, even if the loan carries interest. If the loan is secured by a mortgage in a public deed, in principle stamp duty (“actos jurídicos documentados”) is not payable either, apart from a small fixed amount for the deed's stamped paper. That tax does not apply to deeds for transactions that are subject to property transfer tax, even if they are exempt, as this loan is. Filing it costs nothing and puts the date of the contract on record with the authorities. Together with repayments made through the bank, it helps to prove that the money was lent and not given. If it is not filed, besides breaching that obligation, the loan is left without that proof and it is easier for the tax authorities to treat the money as a gift, on which the person who received it would pay tax. If the debt is later forgiven, that in itself is a gift. In the rest of Spain, the time limit and the form are set by each autonomous community. The income tax return The money lent is not income for either the lender or the borrower, so neither of them declares it as income. Nor does the lender declare the repayments received. What is taxed is the interest, in the lender's return: If the loan carries interest, the interest received each year is income from movable capital (“rendimientos del capital mobiliario”), which is what the law calls the return on money that is lent or deposited. It is declared as savings income. If the loan is interest-free, the law presumes that the lender receives interest, unless the contrary is proved. That interest is calculated at the statutory interest rate (“interés legal del dinero”), which in 2026 is 3,25 % a year. For example, if you lend 20.000 euros interest-free for the whole of 2026 and cannot prove that the loan is free of interest, the tax authorities may consider that you should have declared 650 euros of interest, which is 3,25 % of those 20.000. To prove that it is interest-free, the tax authorities ask for evidence of the loan, of what the money was used for and of its repayment. What helps is a written contract stating that there is no interest, filed with the Catalan tax authority, payment of the money by bank transfer and repayments through the bank, as agreed.