Non-resident tax in Spain: what you owe, what you can reclaim

Understanding IRNR: Spain’s non-resident income tax

Spain taxes non-residents on income arising within its territory. The legal framework is the Impuesto sobre la Renta de No Residentes (IRNR), governed by Royal Legislative Decree 5/2004 (Texto Refundido de la Ley del Impuesto sobre la Renta de No Residentes). Unlike resident income tax (IRPF), IRNR is applied separately to each income source at fixed rates rather than on an aggregate worldwide basis. There is no annual tax return consolidating all sources — each type of income is declared and taxed independently.

The most common situations affecting foreign individuals are:

• Owning Spanish property — whether rented out or simply held as a holiday home
• Receiving dividends from Spanish companies or investment funds
• Selling Spanish property or securities — triggering a capital gains return
• Receiving interest from Spanish bank accounts or bonds

Each of these income types has its own return, rate, and deadline. Getting any of them wrong — or ignoring the obligation entirely — creates a liability that accumulates with interest and surcharges.

Understanding your IRNR obligations is not optional: the Spanish Tax Authority (Agencia Estatal de Administración Tributaria, AEAT) actively cross-references property registers, land registry data, banking information, and international CRS reports to identify non-filers. The statute of limitations is four years, meaning a failure that dates back to 2021 can still be pursued until 2025.

EU residents vs. non-EU residents: the rate and deduction gap

Your country of tax residence outside Spain has a major impact on both your tax rate and your right to deduct expenses. This distinction is fundamental to calculating your actual liability.

Tax rates by residency

EU and EEA residents enjoy a 19% rate across all IRNR categories, aligned with the EU principle of equal treatment. Third-country residents pay 24% as the standard rate, although this may be reduced under an applicable double tax treaty.

The deduction advantage for EU/EEA residents

More significantly, EU/EEA residents can deduct expenses directly related to their Spanish rental income before calculating tax — the same expenses a Spanish resident would deduct under IRPF. This right was established following European Court of Justice case law that found differential treatment of EU and non-EU residents discriminatory (see ECJ case C-282/07 and subsequent Spanish reforms).

Deductible expenses for EU/EEA residents include:

• Mortgage interest on the property loan
• Property management fees (gestor or property manager)
• Repairs and maintenance costs
• Insurance premiums (building and contents)
• Local property tax (IBI — Impuesto sobre Bienes Inmuebles)
• Community fees (gastos de comunidad)
• Depreciation of the building structure (3% of the construction value per year)

Non-EU residents cannot deduct any of these expenses — they are taxed on gross rental income.

Worked example: A UK resident (post-Brexit, third-country) and a German resident both own Spanish apartments generating €18,000 gross rental income per year with €7,000 in deductible costs.

The difference of €2,230 per year reflects both the rate differential and the deduction exclusion. Over ten years, this is more than €22,000 in additional tax for the UK property owner compared to the EU-resident owner — purely because of Brexit. This underlines why residency planning (and in some cases, double tax treaty planning) is commercially significant for non-residents with Spanish property.

The deemed-income trap for holiday home owners

Many foreigners who own Spanish holiday homes and never rent them out are unaware that they still have an annual IRNR filing obligation. This is the aspect of Spanish non-resident tax that generates the most surprises.

Spanish tax law imputes a deemed rental income (renta imputada) to non-resident property owners on the basis that owning a Spanish property generates an economic benefit, even if the property is not rented out. The imputation rules are set out in Article 85 of the IRPF law, applied by reference to IRNR.

How deemed income is calculated

The imputed income is equal to:

• 1.1% of the cadastral value, for properties whose cadastral value has been revised or updated since January 1, 1994
• 2% of the cadastral value, for properties with a cadastral value not revised since 1994

This imputed income is then taxed at the applicable IRNR rate: 19% for EU/EEA residents, 24% for others.

Worked example:

A French couple owns a coastal apartment in Alicante. The cadastral value (valor catastral) is €120,000, last revised in 2015.

• Imputed income: 1.1% × €120,000 = €1,320
• IRNR rate (EU residents): 19%
• Annual tax: €250.80

A Canadian couple owns a similar property. Same cadastral value, not revised since 2001 (pre-1994 rate applies):

• Imputed income: 2% × €120,000 = €2,400
• IRNR rate (non-EU): 24%
• Annual tax: €576

The amounts are modest — but the penalty for not filing Modelo 210 is typically larger than the tax liability itself. A voluntary late filing with a 12-month delay incurs a 15% surcharge; after 12 months, the surcharge rises to 20% plus interest at 3.75% per annum. If the AEAT discovers the failure and opens an inspection, the sanction can reach 50–150% of the unpaid tax.

Finding your property’s cadastral value

The cadastral value (valor catastral) is set by the Catastro (Dirección General del Catastro), the Spanish property valuation registry. It is not the same as the market value or the purchase price — it is typically lower than market value. You can find the cadastral value:

1. On the IBI receipt (Impuesto sobre Bienes Inmuebles, the annual local property tax bill) — the cadastral value is printed prominently on this document
2. On the Catastro online portal (sedecatastro.gob.es) using the property reference number (referencia catastral)
3. On your escritura de compraventa (purchase deed), which usually references the cadastral value

The property reference number (referencia catastral) is a 20-character alphanumeric code that uniquely identifies a property in the Spanish land registry. It appears on the IBI receipt, the purchase deed, and the Catastro online records.

Rental income: quarterly Modelo 210 filing

Use our free Modelo 210 Calculator to estimate your IRNR liability on Spanish property — it covers personal use (deemed income), rental income, and mixed-use scenarios for both EU/EEA and non-EU residents.

When a non-resident rents out a Spanish property, the rental income must be declared quarterly on Modelo 210. The quarterly declaration covers one quarter of actual rental receipts.

Filing deadlines for rental income

These deadlines are hard — there is no extension. Filing one day late automatically triggers a late surcharge.

Calculating rental income tax

EU/EEA resident example:

Maria, a Dutch national, rents her Malaga apartment for €1,500/month for all 12 months of 2025.

Annual gross rental income: €18,000

Deductible expenses (2025):

• IBI: €800
• Community fees: €1,200
• Insurance: €600
• Property management: €1,440 (8% of rent)
• Repairs and maintenance: €500
• Total deductible: €4,540

Taxable net income: €18,000 - €4,540 = €13,460

Q1 declaration (Jan-Mar, €4,500 gross, €1,135 expenses):

• Net income: €3,365
• Tax at 19%: €639.35 (due by 20 April)

And so on for each quarter. Annual tax: €13,460 × 19% = €2,557.40

Non-EU resident example:

David, a US national, rents the same property at the same terms.

Annual gross rental income: €18,000 (no deductions) Annual tax: €18,000 × 24% = €4,320

Q1 declaration (Jan-Mar, €4,500 gross):

• Tax at 24%: €1,080 (due by 20 April)

Capital gains tax on property sale: the 3% retention mechanism

When a non-resident sells a Spanish property, a retention mechanism (retención) applies that catches many sellers by surprise. Under Article 25 of the IRNR law, the buyer of the property is legally obligated to withhold 3% of the purchase price and pay it directly to the AEAT within one month of the sale. This withholding is an advance payment against the seller’s capital gains tax liability.

How capital gains tax is calculated for non-residents

The taxable gain is the difference between:

• Selling price (net of selling costs: agent commission, notary, taxes)
• Acquisition cost (purchase price plus acquisition costs: purchase taxes, notary, registry fees, plus any capital improvements)

The gain is taxed at:

• 19% for EU/EEA residents
• 19% for non-EU residents (capital gains rate was equalised with EU rate in 2015)

Worked example:

Robert, a British national (non-EU post-Brexit), bought a property in 2015 for €200,000 (including all costs) and sells it in 2025 for €320,000. Selling costs (agent, notary, IIVTNU municipal tax): €15,000.

• Selling price net of costs: €305,000
• Acquisition cost: €200,000
• Capital gain: €105,000
• CGT at 19%: €19,950

The buyer withholds 3% of the selling price: 3% × €320,000 = €9,600

Since the actual CGT liability (€19,950) exceeds the withholding (€9,600), Robert must file Modelo 210 for capital gains within 3 months of the sale and pay the difference: €19,950 - €9,600 = €10,350 due.

When the 3% withholding exceeds the actual tax

If the capital gain is small (or there is a loss), the 3% withholding may exceed the actual tax liability. In this case, the seller can reclaim the excess by filing Modelo 210 for capital gains.

Example: Property bought in 2020 for €280,000 and sold in 2025 for €290,000 (net of all costs). Capital gain: €10,000. CGT at 19%: €1,900.

Withholding: 3% × €290,000 = €8,700. Excess withholding: €8,700 - €1,900 = €6,800 reclaim.

BMC prepares and files the reclaim within the legally prescribed window (generally within four years of the date of the excess payment).

Important: plusvalía municipal

In addition to IRNR capital gains tax, property sales in Spain are also subject to the Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana (IIVTNU), commonly called plusvalía municipal. This is a local tax calculated on the theoretical increase in land value based on cadastral land value and years of ownership. It is payable to the municipality. BMC calculates plusvalía liability and includes it in our property transaction advisory.

Wealth tax for non-residents: Impuesto sobre el Patrimonio

Non-residents who own Spanish assets (principally real estate but also financial assets held in Spain) may also be subject to Spain’s wealth tax (Impuesto sobre el Patrimonio, IP). Wealth tax applies to the net value of Spanish assets as at 31 December each year.

Thresholds and rates

The state wealth tax rates and thresholds are:

Non-residents are entitled to a €700,000 personal exemption (minimum exemption from state regulation). Some autonomous communities apply different rates for their residents, but non-residents are taxed under the state schedule.

Important: Spain also introduced a new Impuesto Solidario de Grandes Fortunas (Solidarity Tax on Large Fortunes, ISGF) in 2023 as a complementary levy on net wealth exceeding €3 million, at rates of 1.7–3.5%. This applies to both residents and non-residents with Spanish assets above the threshold.

The wealth tax return is filed on Modelo 714, with the same deadline as IRPF (generally end of June for the prior year). For non-residents, it is one of the less well-known obligations — but for owners of high-value coastal properties, it can be significant.

Worked example: wealth tax on a non-resident property owner

A Norwegian couple jointly owns a villa in Marbella with a net declared value (for IRNR purposes) of €1,200,000. Mortgage outstanding: €250,000. Net Spanish wealth: €950,000.

Per owner: €475,000 each.

After €700,000 exemption per person: neither exceeds the threshold, so no wealth tax is due.

But if the property value is €1,800,000 with no mortgage (€900,000 each):

After €700,000 exemption: €200,000 each is subject to wealth tax.

Tax per person on €200,000:

• 0.2% × €167,129 = €334.26
• 0.3% × (€200,000 - €167,129) = €98.61
• Total per person: €432.87
• Total couple: €865.74

Double taxation treaties: reducing your Spanish tax burden

Spain has signed double tax treaties (Convenios para Evitar la Doble Imposición) with more than 90 countries. These treaties override domestic IRNR rates for specific income types and can significantly reduce withholding on dividends, interest, and royalties.

Common treaty reductions for key nationalities:

Note: Property capital gains are generally taxable in the country where the property is located under most treaties, meaning Spain retains the right to tax non-residents on gains from Spanish property regardless of the treaty.

How to claim treaty benefits

Treaty benefits are not automatic. To claim a reduced rate at source (e.g. on dividend payments), the Spanish payer must receive a certificate of residence (certificado de residencia fiscal) from the tax authority of your home country, confirming that you are resident there for treaty purposes.

If withholding has been applied at the domestic rate rather than the treaty rate, the excess can be reclaimed through a formal AEAT reclaim process. BMC manages both the certificate procurement and the reclaim filing.

Modelo 210 explained: filing deadlines and procedures

Modelo 210 is the principal IRNR return for individual non-residents. It covers:

• Rental income from Spanish property (filed quarterly)
• Deemed income on unrented Spanish property (filed annually by 31 December of the following year)
• Capital gains on Spanish assets (filed within 3 months of the transaction)
• Dividends and interest not subject to withholding at source (filed when income is received)

The form can be filed:

1. Online through the AEAT’s Sede Electrónica, using a Spanish digital certificate or Cl@ve PIN
2. Paper filing at a Spanish bank authorised to receive AEAT payments (increasingly limited to collaborative banks)
3. Through a representative (gestor or asesor fiscal) using their professional digital certificate — this is how BMC files on behalf of our clients

What information you need for Modelo 210

For property deemed income:

• Property reference number (referencia catastral)
• Cadastral value (valor catastral)
• Percentage ownership
• Number of days in the year the property was owned

For rental income:

• Gross rental receipts for the quarter
• Supporting invoices and receipts for deductible expenses (EU/EEA residents)
• Tenant identification if applicable

For capital gains:

• Purchase date and price (with acquisition costs)
• Sale date and price (with sale costs)
• Property reference number
• Details of any prior improvements

Our Modelo 210 calculator

BMC has developed an online Modelo 210 calculator that allows non-residents to estimate their IRNR liability for property-related income. The calculator handles both the imputed income calculation (using current cadastral values) and rental income scenarios, applying the correct rate based on your country of residence. For property sales, it incorporates the 3% withholding calculation and identifies whether a reclaim is likely.

Modelo 720 and Modelo 721: foreign asset declarations

While not strictly an IRNR return, the Modelo 720 (and its new companion, Modelo 721 for cryptocurrencies) is relevant to the broader compliance picture for people with Spanish tax connections.

Modelo 720 is a purely informational return that must be filed by Spanish tax residents who hold foreign assets exceeding €50,000 in any of three categories:

• Bank accounts outside Spain
• Investments (securities, shares, funds) outside Spain
• Real estate outside Spain

Non-residents do not file Modelo 720 — it is an obligation for Spanish residents only. However, if a non-resident property owner subsequently becomes a Spanish tax resident, Modelo 720 becomes mandatory and must be filed in the first year of residency covering all qualifying foreign assets.

The penalties for failing to file Modelo 720 were historically draconian (€5,000 per item, with no statute of limitations on penalties) but have been modified following a 2022 European Court of Justice ruling finding the original penalty regime disproportionate. The revised regime still imposes penalties but limits them to standard late-filing surcharges.

Modelo 721, introduced for tax year 2023, requires Spanish tax residents to disclose foreign cryptocurrency holdings exceeding €50,000. Again, non-residents are not subject to this obligation, but those who become residents must understand it.

What happens if you don’t file: sanctions, surcharges, and inspections

Failure to comply with IRNR obligations is not a victimless oversight. Spain’s penalty system for late or non-filing is structured and escalating:

Voluntary late filing (before AEAT inspection)

If you file and pay late, voluntarily (without being prompted by the AEAT), the surcharges are:

Filing late is always better than not filing. The voluntary disclosure regime (regularización voluntaria) stops the surcharge from escalating into a full penalty.

AEAT-initiated inspection

If the AEAT opens a formal inspection and identifies IRNR non-compliance, the consequences are significantly more severe:

• Sanction for failure to file (when no tax was due): €200 per return
• Sanction for failure to file (when tax was due): 50–150% of the unpaid tax (depending on degree of concealment)
• Late payment interest: 3.75% per annum on unpaid tax
• Full investigation period: Four years from the date the return was due

Regularising historical non-compliance

BMC has extensive experience in regularising historical IRNR failures for non-residents who discover they should have been filing for years. The strategy depends on whether the AEAT has already identified the issue:

• If the AEAT has not yet contacted you, voluntary disclosure under the regularisation regime minimises sanctions
• If you have received a notification (requerimiento) from the AEAT, the response must be precise and prompt — BMC can draft the response and negotiate the penalty assessment
• If the liability is significant, BMC can assess whether a formal regularisation agreement or instalment payment arrangement is appropriate

Non-residents and Spanish property: the full tax calendar

For a non-resident property owner in Spain, the annual compliance calendar looks like this:

For the deemed income return: the 31 December deadline means that the return for 2024 must be filed by 31 December 2025. There is no 25-day extension for non-residents on this return.

Why compliance matters more than it used to

The Spanish Tax Authority has significantly expanded its use of cross-border data exchange under the Common Reporting Standard (CRS), the EU’s DAC2 Directive (automatic exchange of financial account information), and DAC6 (cross-border tax arrangement reporting). The AEAT now receives automatic information about:

• Spanish bank accounts held by foreign residents
• Spanish property owned by foreign nationals (via Catastro and Land Registry)
• Share and fund holdings in Spanish entities by non-residents
• Rental income reported by online platforms (Airbnb, Booking.com and others are now required to report host income to AEAT under DAC7)

This means the AEAT has better information about non-resident income than at any previous point in history, and the risk of detection for non-filers is materially higher than it was five or ten years ago.

BMC’s IRNR compliance service is designed for non-residents who want to be fully compliant without spending their holidays managing Spanish bureaucracy. We handle the entire compliance calendar, respond to AEAT queries on your behalf, and ensure you pay exactly what the law requires — and not a euro more.

Frequently asked questions

I bought my Spanish property in a company name — does IRNR still apply?

If a non-resident individual owns a Spanish property through a company (Spanish or foreign), the analysis depends on the structure. A Spanish SL owning the property would pay corporate income tax (Impuesto sobre Sociedades) on any rental income or gains — not IRNR. However, if a non-resident individual directly owns shares in a Spanish property company and receives dividends, those dividends are subject to IRNR. For foreign companies owning Spanish property, special IRNR rules apply (including an annual charge under Article 40 IRNR if the company is in a non-treaty territory). BMC advises on optimal property holding structures.

My Spanish property was inherited — do I still have IRNR obligations?

Yes. If you are a non-resident who inherited a Spanish property, you have the same IRNR obligations as any other non-resident property owner from the date of acquisition. The inheritance itself may also have been subject to Impuesto sobre Sucesiones y Donaciones (inheritance tax) in Spain. BMC can review the full history and regularise any accumulated obligations.

I am a UK national — how has Brexit changed my IRNR position?

UK nationals who were previously EU residents benefited from the EU rate (19%) and full expense deductibility on rental income. Post-Brexit, the UK is treated as a third country for IRNR purposes, meaning: (a) the standard rate is 24% (though the UK-Spain double tax treaty may cap this), and (b) expenses are not deductible from gross rental income. UK residents should review their IRNR position with BMC to understand the treaty position and whether any restructuring is advisable.

What is the difference between cadastral value and market value?

The cadastral value (valor catastral) is set by the Catastro administration and is used for tax calculation purposes (IBI, IRNR deemed income, some wealth tax calculations). It is generally significantly lower than the market value — sometimes 30–60% lower, particularly in coastal areas. The market value (valor de mercado) is what you could sell the property for. The purchase/sale price used for capital gains purposes is the actual transaction price, not the cadastral value.

Can I offset Spanish property losses against other Spanish income?

Under IRNR, income from different sources cannot generally be aggregated or offset against each other — each source is taxed independently. If a property generates a rental loss in one quarter, that loss cannot offset rental income from another property or a capital gain. Within a single quarter and a single property, however, EU/EEA residents can offset deductible costs against gross income, which may result in zero or negative net income (and zero tax) for that quarter.