Non-Residents

 

1. Taxation on income or use of real estate located in Spain (Modelo 210)

If you use your Spanish property exclusively for your own purposes and it does not constitute your main residence, you must declare this property in your annual "Non-Resident Income Tax Return" (IRNR) as deemed income. Depending on whether the property is used personally or rented out, the following situations may arise:

Case 1: Exclusive personal use of the property as a holiday residence.

This deemed income amounts, depending on the applicable update of the cadastral value, to 1% or 2% of the cadastral value. This percentage of the cadastral value is considered deemed income from real estate and is taxed at 19% (for residents of the EU, Iceland, Norway and Liechtenstein). Residents of other countries, such as Switzerland, are subject to a 24% tax rate. The corresponding Modelo 210 can be filed during the following tax year.

Case 2: Exclusive rental of the property.

If you rent your property continuously to long-term tenants (rental agreements of at least one year), an income and expense calculation must be prepared in January of the following year and the resulting profit must be declared through Modelo 210, being subject to taxation at 19% or 24%. Similar to other countries, residents of the EU, Iceland, Norway or Liechtenstein may deduct all related expenses, depreciation, financing costs and other deductible expenses. For residents of other countries, rental income is taxed at a flat rate of 24%.

Case 3: Partial rental (tourist and seasonal rental).

If you only rent your property during part of the year, the property is either vacant during the remaining period or used personally by you. In both cases, this period must be treated as personal use and taxed accordingly as deemed income. If the property has been rented out for part of the year, you may deduct the corresponding proportion of deductible expenses against rental income. For the remaining period of the year, personal use taxation (imputación de renta) applies. In this case, two tax returns must be filed: the first after preparing the income calculation in January of the following year, and the second for the personal use period during the following year.

 

Conclusion and information regarding taxation in the country of residence

Non-resident individuals who own real estate in Spain are generally required to file at least one tax return per year (both in cases of personal use and rental). Since rental income generated in Spain is subject to withholding taxation at 19% or 24%, this tax can normally be credited in the taxpayer's country of residence according to the applicable Double Taxation Agreement.

This deemed income generally corresponds to 1% or 2% of the cadastral value of the property, as ownership of the property is considered an increase in wealth for tax purposes. This 1% or 2% of the cadastral value is therefore treated as deemed income and taxed at a rate of 19%.

If you only rent your property during part of the year, it will either remain vacant during the rest of the year or be used personally by you. In both cases, this period must be treated as personal use and taxed accordingly as deemed income. If you rent the property for half of the year, you may deduct 50% of the deductible expenses against rental income, while for the remaining half of the year you must declare 50% of the deemed income (imputación de renta). Please note that, due to rental activities, quarterly tax returns (trimestrales) are generally required in most cases.

We not only file the corresponding tax returns on your behalf, but, if requested, we also handle all communication with the Spanish Tax Agency and represent you in Spain, ensuring that you do not miss any notifications while you are abroad.

 

Our services:

1. Preparation of the income and expense calculation based on the information provided by you and preparation of the Spanish Non-Resident Income Tax Return (Modelo 210) regarding rental income (alquiler).
2. Filing of Modelo 210 regarding rental income, optionally with direct debit from the client's Spanish bank account or through our client account.
3. Preparation of the calculation for personal use based on the information provided by you and preparation of the Spanish Non-Resident Income Tax Return (Modelo 210) regarding deemed income from personal use (imputación de renta).
4. Preparation of the Spanish Non-Resident Income Tax Return (Modelo 210) regarding personal use (imputación de renta).
5. Representation before the Spanish Tax Agency for one year after filing the tax return and from the date of engagement (power of attorney through digital certificate required).
6. In order to obtain the current cadastral value and calculate depreciation, we require either your digital certificate or an up-to-date cadastral extract. If the property is correctly registered with the Spanish Cadastre, no additional documentation will be required.
7. For data collection purposes, we will send you an Excel document in December. Please complete the information regarding income (rental), rental periods, tenant details, deductible expenses, etc. Please note that, in the event of a tax audit, all deductible expenses must be supported by complete invoices (Facturas). If you have any questions regarding deductibility, you may contact us by telephone before submitting the information. The depreciation calculation will, of course, be prepared automatically by our firm.
8. Together with our email regarding data collection, you will also receive an annually updated dossier in German containing all important information regarding documentation requirements, deductible expenses and invoice examples.