The non-resident income tax is a tax levied on income obtained in Spanish territory by non-resident individuals and entities. In other words, when a non-resident owns a property in Spain, it is subject to this tax.
This tax is levied at a rate of 19% for residents of the European Union, Iceland, and Norway and 24% for all other taxpayers.
When determining the income subject to tax, we have to distinguish the following situations depending on the use of the property:
1. Deemed income from the urban property for own use:
This is the situation applicable to dwellings that are not rented out. In these cases, the amount of the tax is the result of applying a coefficient to the cadastral value of the property, which can be 1.1% or 2% depending on the year of review of values by the municipality in which it is located. To the result, 19% or 24% is applied depending on the taxpayer’s country of tax residence.
Peter, a resident in Sweden, owns a flat in Mijas where he spends some weekends. For the rest of the year, it remains empty. The cadastral value (reviewed more than 10 years ago) is 100.000 euros.
Taxable base 2% x 100,000 € = 2,000 €
Tax rate: 19%
Tax payable 19% x 2,000 € = 380 €
2. Income from rented properties:
In this case, the income to be declared is the full amount received from the tenant.
Residents of EU countries, Iceland and Norway only: Expenses directly linked to rental activity e.g. cleaning costs, internet fees, etc, can be deducted from the taxable amount.
It is important to note that the possibility of deducting these expenses is not applicable when the taxpayer’s tax residence is in a country outside the European Union. The income to be declared in this case is the full amount received from the tenant, without deducting any expenses.
The form used to declare the income of non-residents in Spain is the so-called «modelo 210», which must be filed on a quarterly basis in the case of income derived from rent and can be grouped together in a single return when it comes from the same payer.
The submission term is during the first twenty calendar days of the months of April, July, October, and January, in relation to income whose accrual date falls within the previous calendar quarter.
It should be noted that in the case of properties that are rented for part of the year and remain empty for the rest, the taxpayer must also file a declaration of the imputed income corresponding to the number of days that the property has been empty, without prejudice to the declaration of the aforementioned income derived from the rental.
Do you need help filing your non-resident tax in Spain? Do you have any doubts about your obligations as a property owner? Get in touch and I will help you answer these questions.