Own property or earn income in Spain as a non-resident? Here is what you owe
Many non-EU and EU nationals who own property in Spain or receive other Spanish-source income are unaware of their obligations under the Impuesto sobre la Renta de No Residentes (IRNR), Spain's Non-Resident Income Tax. The annual filing of the Modelo 210 is required not only when a property generates rental income, but also when a property sits empty — in which case the Spanish tax authorities impose an annual notional rental income (imputed income) based on the property's rateable value. Foreign property owners discover this obligation most commonly when they try to sell their Spanish property and the buyer withholds 3% of the purchase price as a prepayment of the seller's IRNR, or when the Spanish Tax Agency (AEAT) sends a demand letter after cross-referencing property registry data with tax declaration records. Late filings attract surcharges; failure to file at all can result in penalties of up to 150% of the unpaid tax amount.
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Specialised advice and personal service
BMC's [non-resident tax](/en/specialized-tax/non-resident-tax) team specialises in IRNR compliance for property owners and investors from over 30 countries. We manage the complete Modelo 210 filing cycle: quarterly rental income declarations, annual imputed income filings, capital gains declarations upon property sales, and dividend or interest income filings. We determine the correct tax rate (19% for EU/EEA residents, 24% for others), identify applicable double taxation treaties that may reduce the rate, apply all available deductions for EU residents, and request refunds of excess 3% withholdings on property sales.
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Non-residents owning Spanish property must file Modelo 210 annually for imputed income (even on vacant properties) at 1.1-2% of cadastral value, taxed at 19% (EU/EEA) or 24% (non-EU including UK post-Brexit) — deadline is 31 December of the following year.
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EU/EEA residents pay 19% on net rental income (after deductible expenses); non-EU residents pay 24% on gross income with no deductions — a mortgaged Spanish rental property generates significantly higher tax for a UK landlord post-Brexit.
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When selling Spanish property, the buyer withholds 3% of the sale price and remits to AEAT — this is an advance against the seller's capital gains tax; if the 3% exceeds the actual gain tax, the seller files Modelo 210 to claim the refund.
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The AEAT cross-references Land Registry data with Modelo 210 filings — non-filing is routinely detected; voluntary late filing attracts 5-20% surcharges, far less than the 50-150% penalties triggered by AEAT-initiated proceedings.
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The problem
Many non-EU and EU nationals who own property in Spain or receive other Spanish-source income are unaware of their obligations under the Impuesto sobre la Renta de No Residentes (IRNR), Spain's Non-Resident Income Tax. The annual filing of the Modelo 210 is required not only when a property generates rental income, but also when a property sits empty — in which case the Spanish tax authorities impose an annual notional rental income (imputed income) based on the property's rateable value. Foreign property owners discover this obligation most commonly when they try to sell their Spanish property and the buyer withholds 3% of the purchase price as a prepayment of the seller's IRNR, or when the Spanish Tax Agency (AEAT) sends a demand letter after cross-referencing property registry data with tax declaration records. Late filings attract surcharges; failure to file at all can result in penalties of up to 150% of the unpaid tax amount.
Our solution
BMC's [non-resident tax](/en/specialized-tax/non-resident-tax) team specialises in IRNR compliance for property owners and investors from over 30 countries. We manage the complete Modelo 210 filing cycle: quarterly rental income declarations, annual imputed income filings, capital gains declarations upon property sales, and dividend or interest income filings. We determine the correct tax rate (19% for EU/EEA residents, 24% for others), identify applicable double taxation treaties that may reduce the rate, apply all available deductions for EU residents, and request refunds of excess 3% withholdings on property sales.
How we do it
Income categorisation and obligation mapping
We review all your Spanish-source income for the relevant period: rental receipts, periods of personal use, gains from asset disposals, and any investment income. We determine which Modelo 210 modality applies to each type of income and identify any applicable double taxation treaty between Spain and your country of residence.
Tax calculation and deductions
For rental income, we calculate whether you can deduct allowable expenses (available for EU/EEA residents) or must tax the gross amount (non-EU residents at 24%). For imputed income on vacant properties, we apply the correct percentage (1.1% or 2%) of the rateable value. For property sales, we calculate the taxable gain after adjusting the acquisition cost and applying any treaty benefits.
Preparation and timely filing of Modelo 210
We prepare the declaration with all required property details (catastral reference, ownership percentage), income amounts, and withholding credits. We file electronically within the applicable deadlines — quarterly for rental income, annually for imputed income, within three months of completion for capital gains.
Withholding management and refund claims
If you have sold a Spanish property and a 3% withholding was applied, we calculate the definitive IRNR liability and file a refund claim for any excess withholding. We also advise on [fiscal representation in Spain](/en/finance-reporting/vat-representation/) for non-residents who require a designated representative with the AEAT.
I inherited an apartment in Alicante from my parents and had no idea about the annual IRNR obligations. BMC sorted out five years of unfiled imputed income declarations, arranged the refund from my mother's property sale, and now handles everything quarterly. I have complete peace of mind.
Non-resident income tax in Spain: an overview
The Impuesto sobre la Renta de No Residentes (IRNR) is the tax that applies to income generated in Spain by individuals who are not Spanish tax residents. It is administered separately from the regular income tax (IRPF) that applies to residents, and it operates on a per-income-event basis rather than annually: different types of income have different filing frequencies and deadlines.
The Modelo 210 is the universal form for IRNR declarations and is used for four main categories of income from Spain:
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Rental income from Spanish property: Filed quarterly, calculated on either gross income (non-EU residents) or net income after deductible expenses (EU/EEA residents).
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Imputed income on vacant property: Filed annually for the full year, calculated on the rateable value of the property regardless of whether it generates any actual income.
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Capital gains from asset sales: Filed within three months of the date of completion (escritura de compraventa), covering gains from the sale of real estate, shares in Spanish companies, or other assets in Spain.
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Passive income (dividends, interest, royalties): Filed as each payment is received, subject to any applicable double taxation treaty rates.
Why the 3% withholding on property sales matters
One of the most common surprises for non-resident property sellers in Spain is the mandatory 3% withholding. Under Spanish law, every buyer of Spanish real estate from a non-resident seller is legally obliged to withhold 3% of the agreed purchase price and pay it directly to the AEAT within one month of completion, using form Modelo 211. This is not negotiable and not optional.
From the seller’s perspective, this means you receive 3% less than the agreed price at completion. You then have three months to file your Modelo 210 for the capital gain and calculate the definitive IRNR liability. If the tax on your actual gain is less than the 3% withheld (which is common if the gain is modest relative to the sale price), you can claim a refund of the difference — a process that can take six to eighteen months.
This timeline needs to be factored into your financial planning for any Spanish property sale. BMC manages the entire process, from pre-sale gain calculation to refund claim, in coordination with our real estate law team.
Double taxation treaties: reducing your liability
Spain has double taxation treaties with more than 90 countries. Many of these treaties reduce the withholding rates on dividends, interest, and royalties below the standard IRNR rates. Some treaties also affect the taxing rights over capital gains from real estate, though Spain generally retains taxing rights over gains from Spanish property regardless of treaty provisions.
To benefit from treaty rates, you must apply for the treaty treatment — it is not applied automatically. We manage these treaty claims as part of our non-resident tax service and coordinate with our VAT representation service for clients who also have Spanish VAT obligations.
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