What are the taxes on a property owned by a non-resident?

I.B.I. (Impuesto sobre Bienes Inmuebles): This is the equivalent of the Property Tax.

It is a municipal tax, and all properties are registered with a cadastral value. Based on this value, each municipality applies a tax rate to calculate the amount to be paid. Generally, this is paid in three installments, and it is recommended to have it directly debited from your bank account to avoid extra charges.

I.R.N.R. (Impuesto sobre la Renta de No Residentes): TAX ON THE INCOME OF NON-RESIDENTS.

This tax is levied on the ownership, rental, and transfer of property by non-residents. I will cover the tax on property transfers in another post.

FOR PERSONAL USE: In fact, the tax authorities (Hacienda) estimate that you could generate rental income from your property in Spain. Therefore, even if you do not rent it out, the income to declare will be 2% of the cadastral value of the property if it has not been revised in the last 10 years, or 1.1% if it has been revised during this period. This is the same income imputation that is regulated for residents.

For residents of the European Union, Iceland, and Norway, the tax rate is 19%, while for others (those who are not part of the EU, Iceland, or Norway), the rate is 24%. You must submit form 210 every year, after the year of acquisition. If two people buy together, each must submit a separate declaration. The proportional part of this amount will be declared if the property was not owned for the full year or if it was rented for a certain period.

EXAMPLE: Mr. and Mrs. Martin, residents of France, own a villa in L'Ametlla de Mar. They only come for vacations and do not rent it out. The cadastral value of the house, which was revised 5 years ago, is €60,000 in 2020.

Taxable base: 1.1% of €60,000 = €660

Tax rate: 19%

Amount to pay: 19% of €660 = €125.40

Since they are two owners (50%-50%), each will file a separate form 210 and will have €62.70 to pay each. They must submit form 210 between January 1st and December 31st, 2021.

FOR SEASONAL RENTAL :The declaration is made using form 210. You can group all the tenants by quarter by indicating code 35. The deadline for submission and payment is within the first 20 days of April, July, October, and January, based on the income from the previous quarter. For residents of the European Union, Iceland, and Norway, the tax rate is 19%, and they can deduct expenses proportionally to the duration of the rental: property tax, garbage collection, community fees, repair costs, insurance, etc.

For residents outside the European Union, Iceland, or Norway, the tax rate is 24%, and they cannot deduct any expenses.