Non-resident tax.
When you own real estate in Spain, you are liable for several taxes: the “IBI” cadastral tax, the garbage collection tax “Basura”, and the income tax for non-residents “IRNR”.
Tax declaration for non-residents in Spain: Modelo 210
The Modelo 210 is the declaration form for non-residents in Spain, used to declare different forms of income. It is known in Spain as the “Impuesto sobre la Renta de no Residentes” (IRNR).
Filling out this form and paying income tax is mandatory for all non-residents*. For those who do not use their property for themselves, but also for those who generate income from rentals.
The declaration is mandatory, but the form is not sent automatically. Acting on your own is the message. You can file the declaration yourself, but many people seek assistance from a fiscal representative or an administrative office.
*If you stay in Spain for a period of more than 6 months (183 days), you are required to register as a resident in Spain and thus become a tax resident.
When must you pay?
The payment deadline is December 31st. Let’s say you owned a Spanish property in 2023, you must pay the tax by December 2024 at the latest.
In all cases, the income for which you declare exceeds that of the previous year. This only applies to owners who do not rent out their property. If rented, the tax is based on the year of current income.
If you miss this date, it is advisable to act as soon as possible and pay the tax immediately. This means that if the tax administration intervenes later, it could lead to late payment penalties.
I have never paid this tax, what should I do?
In this situation, you must ensure that taxes are paid and put in order for future payments. Spanish tax authorities can go back four years to claim missing taxes. For homeowners who have not paid these taxes for 10 years, it is recommended to put them in order for the last four years.
In extreme cases, tax authorities are empowered to place an embargo on your bank account.
Over the years, the tax administration has considerably strengthened its controls and receives a lot of information from various sources. Failure to comply with tax obligations can also cause problems later, when the property is sold or transferred to an heir or donation. In these cases, missed tax payments accompanied by penalties may appear.
A Spanish property with multiple owners
The tax on non-residents is personal. This means that when a property has multiple owners, each of them receives the declaration separately.
Consequently, each individual pays their share of the total tax.
Tax Rates
If you are a resident of a European Union country, Norway, or Iceland, a tax rate of 19% is applied. A rate of 24% applies to residents of other countries.
If there is no rental income, a deemed income (potential rental value) is calculated. This amounts to 2% of the cadastral value of the property, or 1.1% if the cadastral value was revised within the last 10 years.
Why a 3% retention on NR sales?
The buyer is required to withhold 3% of the sales price to pay the tax liability of the non-resident. He must deposit the withheld amount with the tax authorities within a period of one month using form 211 and send a copy to the seller. It will be deducted from the final tax on capital gains to be paid.
Added to this is the MUNICIPAL tax on capital gains (Plusvalía), which is the tax that depends on the value of the land.
It is a municipal tax where each of the Town Halls of the Autonomous Communities sets the rates. The best way to know the sales tax on a house is to consult the local government.
