Tax Obligations for Non-Residents with Property in Spain: Understanding the Modelo 210

If you are a non-resident in Spain and own a property in the country, you must be aware of your tax obligations. Whether or not you rent out the property, you are required to file the Modelo 210 with the Spanish Tax Agency.

Filing the Modelo 210

The Modelo 210 is the tax return for non-residents and must be filed annually to declare property ownership. This tax applies even if the property is not rented to third parties, as the Spanish tax authorities consider that the property generates an imputed income.

Non-Rented Properties

If the property is not rented, non-residents must file the Modelo 210 annually and pay tax on imputed income. The taxable base is calculated by applying a percentage to the cadastral value of the property, depending on whether it has been reviewed in the last 10 years or not.

The applicable tax rate is currently 24% for non-residents from non-EU countries and 19% for residents of the EU, Iceland, and Norway.

Rented Properties

If the property is rented, the Modelo 210 must also be filed to declare rental income. In this case:

_ All rental income received during the year must be declared.

  • Only expenses directly related to generating income can be deducted, such as: _ Mortgage interest

    • Repair and maintenance costs

    • Property insurance

    • Utilities (water, electricity, community fees) if covered by the owner

    • Purchase of furniture, which will be amortized

    • Among other expenses _ Expense deductions can only be applied proportionally to the days the property was rented.

It is important to note that non-residents from non-EU countries cannot deduct any expenses.

Local Taxes: IBI

In addition to the Modelo 210, property owners in Spain must pay the Real Estate Tax (IBI) annually. This tax is regulated at the municipal level, and the payment deadline depends on the municipality where the property is located.

Summary

Owning property in Spain as a non-resident comes with important tax responsibilities. To avoid penalties, remember to:

_ File the Modelo 210 annually, whether you rent the property or not. _ Declare all rental income and deduct only applicable expenses if eligible. _ Pay the IBI annually according to the municipal tax calendar.

For more information and personalized assistance, please do not hesitate to contact us.