Non-resident property tax in Spain: IRNR, imputed income and Modelo 210

Owning a home in Spain without being a tax resident there gives rise to tax obligations that recur every year and that many owners are unaware of until they receive a notice from the tax authority. A non-resident's property taxes do not end at the moment of purchase: Non-Resident Income Tax also taxes the mere enjoyment of the property, the income it generates if let, and, in due course, the gain obtained on selling it. It is worth knowing precisely what is payable, how a non-resident's imputed income is calculated, and which returns must be filed each year.

IRNR: how someone who owns property in Spain but does not live there is taxed

Anyone who is not a tax resident in Spain but owns a property located in Spanish territory is taxed under Non-Resident Income Tax (IRNR, for its Spanish initials), governed by the consolidated text approved by Royal Legislative Decree 5/2004, of 5 March. The general rate is 24%, although it is reduced to 19% for taxpayers resident in another European Union State, as well as in Iceland, Norway and Liechtenstein, under its article 25.

This domestic taxation operates alongside the network of double taxation treaties that Spain has signed with most countries. As regards real estate, the general rule of those treaties —following the model of the Organisation for Economic Co-operation and Development (OECD)— allocates the power to tax to the State where the property is located; that is, Spain retains the right to levy the tax, and the owner's country of residence then relieves the double taxation. We analyse the general mechanics of the tax, with its treaties and formal obligations, in detail in Taxation of non-residents in Spain.

Imputed income: why you pay even if the home is not let

What most surprises foreign owners is that IRNR is payable even where the home stands empty or is used personally. Where an urban property is available to its owner and generates no income —it is not let— the law deems it to produce a notional income: so-called imputed income. To quantify it, its article 24.5 refers to the real-estate income imputation regime of article 85 of the Personal Income Tax Act.

The calculation is straightforward. The taxable base results from applying a percentage to the cadastral value of the property, which appears on the property-tax (IBI) receipt: 1.1% where the cadastral value has been revised through a collective valuation procedure with recent effect, and 2% in all other cases. The IRNR rate —19% or 24% depending on residence— is then applied to that base. The income is computed in proportion to the days of ownership during the year and allows no deduction of expenses whatsoever. This imputed income is declared on Modelo 210, which may be filed throughout the calendar year following the accrual date, set at 31 December.

Modelo 210 and the taxation of rental income

Modelo 210 is the self-assessment return by which a non-resident declares all Spanish real-estate income, both imputed income and rental income should they decide to let the home. The taxation of rental income, however, differs significantly depending on where the owner resides. Residents of the European Union, Iceland, Norway and Liechtenstein are taxed on net income —they may deduct the expenses connected with the letting in proportion to the rental period— and at 19%. Other non-residents are taxed on gross income, with no deduction of expenses, and at 24%.

As to how it is declared, a recently applicable change is worth bearing in mind. Order HAC/56/2024, of 25 January, allows, for rental income accruing from 1 January 2024, the annual grouping into a single return of income where the result is payable, so that the filing deadline becomes the first twenty calendar days of January of the year following accrual. Before this reform, the owner had to file a return for each property on a quarterly basis, which multiplied the formal obligations.

The 3% withholding when you sell: Modelo 211

The final obligation is triggered on transferring the home. Its article 25.2 requires the buyer of a property whose seller is a non-resident to withhold and pay over 3% of the agreed consideration, as a payment on account of the IRNR owed by the transferor. That withholding is paid via Modelo 211 within one month of the transfer, and operates as a guarantee that the non-resident will meet the tax on their capital gain.

The seller, for their part, must declare the capital gain obtained —taxed at 19%— by filing their own Modelo 210, from which the withholding suffered is deducted; if the amount withheld exceeds the resulting liability, they may request a refund of the excess. This mechanism forms part of the set of taxes and safeguards of the purchase that we address in Buying property in Spain as a non-resident.

An open debate: the proposal to tax purchases by non-EU non-residents

On the level of public debate, it is worth placing one widely reported measure in careful context. On 13 January 2025, the Government announced a package of housing measures that contemplated the possibility of taxing at a rate of up to 100% the acquisition of property by non-EU non-residents. This is, as of today, a legislative policy proposal: there is no rule in force, nor even a draft bill in progress, that has given effect to it, so no tax obligation derives from it. It is a matter whose evolution is worth following —given its potential impact on foreign real-estate investment— but which, as things stand, does not alter the regime described.

How we help you with non-resident property tax in Spain at RCM Legal

There are several points of friction that, in practice, give rise to avoidable penalties and surcharges. The most common is unawareness of imputed income: the owner who only uses the home for a few weeks a year assumes there is nothing to declare and lets years pass without filing Modelo 210, which the tax authority can claim with interest. Add to this errors in applying the double taxation treaty, the improper deduction of expenses by someone not resident in the European Union, or the lack of coordination between the 3% withholding and the declaration of the gain on sale, which often leaves the seller unable to recover an excess that was due to them.

At RCM Legal we advise foreign owners on the entire tax position of a non-resident with a home in Spain: we calculate and file Modelo 210 for imputed income and for rental income, we plan the taxation in accordance with the applicable treaty, and we handle the 3% withholding and the refund on sale. If you own a property in the Region of Murcia or the province of Alicante, or plan to, our tax lawyers for non-residents in Murcia and Alicante bring order to your obligations and prevent contingencies with the Spanish tax authority. Tell us about your case.