As we are approaching the end of the year it is important to remind our readers that before the end of the year taxes needs to be filed and paid.

In order to avoid penalties for late payment we recommend contacting asap your advisor or a lawyer in case you have purchased a property in Spain on or before 2023.

If you are not tax resident in Spain and own property, Form 210 must be filed which refers to a “non-residents “ tax (in Spanish “Impuesto sobre la Renta de no Residentes – IRNR ).

This tax is levied based on a hypothetical rental from the property.

The income to be declared is the amount resulting from the cadastral value of the property, as shown on the Real Estate Tax receipt (I.B.I. or Impuesto de Bienes inmuebles) in the following percentages:

•  2.0% in general.

•  1.1% in the case of property whose cadastral value was revised recently.

As established in art. 24.5 LIRNR, in the case of  a  non-resident, the imputed income of real estate located in Spanish territory will be determined in accordance with the provisions of the Personal Income Tax Law.

The art. 85 of Law 35/2006 of November 28 of Personal Income Tax, provides that ‘In the case of urban real estate, in both cases not affected by economic activities, nor generating income from capital, excluding the habitual residence and the land not built, will be considered as imputed income the amount that results from applying 2 percent to the cadastral value, being determined proportionally to the number of days that correspond in each tax period.

In the case of properties located in municipalities in which the cadastral values ​​have been reviewed, modified or determined by means of a general collective valuation procedure, in accordance with the cadastral regulations, and have entered into force in the tax period or in the within the ten previous tax periods, the percentage will be 1.1%

To the resulting amount a tax rate is applied:

For residents of the EU, Iceland and Norway the tax rate is 19%.

For residents of other countries including UK the rate is 24%. 

If you have not owned the property for the entire year or if it was leased for part of the year, you must declare the corresponding proportion. The place of filing is the branch of the State Tax Administration Agency corresponding to the place where the property is located

Changes to Tax Filing for Income Earned from 2024:

For income earned from 2024 onwards, there is an option to group rental income annually (eliminating the quarterly grouping option), provided certain conditions are met. Alternatively, you can continue to submit individual filings for each rental period.

Annual Grouping of Income:

You may group rental income if it comes from the same payer, is subject to the same tax rate, and comes from the same property (with “Type of Income: 01”). However, if rental income is not subject to withholding, you may also group income from multiple payers if it applies to the same tax rate and property (in this case, indicate “Type of Income: 35” and leave the payer details blank).

Annual Filing Deadline: If you choose annual grouping, the deadline to submit and pay will be the first 20 days of January in the year following the rental income period. For example, income earned in 2024 must be declared by 20 January 2025. 

Separate Declarations:

If you prefer to declare each rental income period separately, you must file by the first 20 days of April, July, October, and January, depending on the income earned in the previous quarter. For example, for rent collected from January to March 2024, you would need to submit by 20 April 2024. 

How can I be classified as a non-resident?

The general rule is that if you spend more than 183 days (not necessarily consecutive) in Spain, you are considered a tax resident. You can also be classified as a tax resident if your main place of business is in Spain or if your spouse or dependent children live in Spain.

(Legal Feature: Non-Resident Tax)

Keywords: Property in Spain, Tax Resident, No Residentes, Impuesto, Form 210

Reader’s comment: “My goodness how complicated does this sound??? There’s no wonder people try to avoid paying taxes or filling in forms.” – Em Bee Jay Kaye