Property owners in Spain – who are not residents – are also taxed and must, therefore, declare the income obtained in Spanish territory by means of Tax Form 210. Non-resident income tax (IRNR).
The owners of real estate in Spain with income in Spanish territory are subject to tax and must submit a tax return 210 if the income comes from:
- The sale of real estate
- Imputed income from urban real estate (not rented)
- Income from rental of real estate: including personal use
In the case that owner meet more than one of the aforementioned criteria, they may include the different kinds of income in the same tax return, for example, if a property has been rented and sold in the same year, or if a property, which is not used, is sold and rented in the same year.
If the tax form is completed and submitted after the stipulated deadlines, it may be subject to sanctions. Said deadlines also vary according to the kind of income, as can be seen below:
- For income from the sale of real estate, the deadline is three months as from the end of the first month after the date the property is conveyed (sold).
- For imputed income from real estate, the submission and payment deadline is the end of the following calendar year (31 December of each year). In the event of online submission, a direct debit payment can be set up for the amount to pay from 1 January to 23 December.
- For the other kinds of income:
- For Tax files with tax to pay: during the first 20 calendar days of the months of April, July, October and January.
- For Tax files that are offset: from 1 to 20 January of the following year after the income generation period.
- For Tax files with return request: they must be submitted as from 1 February of the following year after the income was obtained and within 4 years.
As regards income from renting property, certain expenses may be deducted that are directly related to the rented property, which includes: repair costs, taxes e.g., property tax (IBI), local property rates and insurance, or loan interest corresponding to its acquisition.
However, only non-EU residents from Norway and Iceland can deduct these expenses. Residents from Switzerland, however, are not allowed to apply said deductions. Only those supported by invoices can be included.
Calculation of the tax base – property owners in Spain
- Taxable income (that is, if the property was not rented for the entire previous year)
The tax base is 2% of the cadastral value. This amount refers to the calendar year, but will be proportionately reduced when the property has not been owned for one entire year.
In the case of property with cadastral values revised or amended as from 1 January 1994, the tax base will be 1.1%
- Earnings from rented properties
The earnings to declare will be the total sum received from the tenant, less deductible expenses.
Calculation of the amount to declare – property owners in Spain
For property owners in Spain, the type of tax rate to apply on the tax base, for non-EU residents, from Iceland and Norway is 19%, and for the rest, the tax rate is 24%.