For Foreigners That Own a Property in Spain
Spain taxes real estate income based primarily on two factors:
- 1️⃣ Where the property is located, and
- 2️⃣ Where the taxpayer resides.
This determines whether the taxpayer is subject to Personal Income Tax (IRPF) or Non-Resident Income Tax (IRNR).
🧭 General Overview
In international taxation, real estate is always taxed where it is physically located. This principle is reflected in Spain’s domestic law and in most Double Taxation Treaties (DTAs) based on the OECD Model Convention.
| Taxpayer’s Residence | Location of Property | Spanish Tax | Key Points |
|---|---|---|---|
| Spanish resident | Abroad | IRPF (Personal Income Tax) | Must declare worldwide income, including foreign property. Deduction for taxes paid abroad may apply. |
| Non-resident | Spain | IRNR (Non-Resident Income Tax) | Spain always taxes income and gains from property within its territory, regardless of DTA existence. |
🔵 Non-Residents (IRNR)
Non-residents who earn income from property in Spain must pay Non-Resident Income Tax (IRNR).
The tax treatment depends on whether they reside in the EU/EEA (Norway, Iceland) or elsewhere.
| Residency | Tax Rate | Expenses Deductible | Condition |
|---|---|---|---|
| EU, Norway, Iceland | 19% | ✅ Same deductions as residents (interest, IBI, insurance, repairs, etc.) | Must provide a tax residence certificate. |
| Other countries (e.g. USA, UK, Canada, UAE) | 24% | ❌ No expenses deductible | Entire gross income taxed. |
This distinction ensures that EU residents enjoy treatment closer to Spanish residents, while others are taxed more simply on their gross income.
Filing obligations for non-residents:
| Form | Purpose | Frequency |
|---|---|---|
| 210 | Declares rental income, imputed income, or capital gains | Quarterly (if rent) or annually (if losses) |
| 216 | Tenant (if company) withholds tax and files it | Quarterly |
| 296 | Annual summary of withholdings | Once per year |
✳️ Example – Non-Resident Renting in Spain
Mr. David Johnson, Canadian resident, rents an apartment in Alicante.
| Monthly rent | €1,200 |
| Annual gross income | €14,400 |
| Expenses | not deductible (non-EU) |
| Tax rate | 24% |
| Annual IRNR | €3,456 (€14,400 × 24%) |
✅ Mr. Johnson must file Form 210 quarterly and pay €864 each quarter.
He cannot claim any expense deductions because he is not an EU/EEA resident.
✳️ Example – Non-Resident from France
Ms. Claire Dubois, French resident, owns a flat in Madrid.
| Annual rent | €9,600 |
| Expenses (IBI, repairs, insurance) | €2,100 |
| Net taxable base | €7,500 |
| Tax rate (EU) | 19% |
| IRNR payable | €1,425 |
Because she is an EU resident, she can deduct her real costs.
She files Form 210 quarterly or annually, depending on her situation.
🏡 Imputed Income (When Property is Not Rented)
Spain also taxes property owners who do not rent or use their property for business.
This “imputed income” reflects a notional rental value of the property.
| Taxpayer | Base for imputed income | Rate | Declaration |
|---|---|---|---|
| Resident (IRPF) | 1.1% of half of acquisition value (if no cadastral value) | Taxed at resident’s progressive rate | Declared annually |
| Non-resident (IRNR) | 2% of cadastral value (1.1% if updated in last 10 years) × days of ownership | 19% (EU/EEA) / 24% (others) | Form 210, income type 2, filed next year |
📅 Accrual date: December 31 each year
💳 Payment deadline: All year following, direct debit allowed until December 23.
✳️ Example – Imputed Income for a Non-Resident
Mr. Erik Hansen, Norwegian resident, owns a holiday apartment in Málaga worth €200,000 (cadastral value €90,000).
| Imputed base | 1.1% × €90,000 = €990 |
| IRNR tax (19%) | €188.10 |
He declares this amount on Form 210 the following year, even if the apartment was empty.
🏚️ Sale (Transfer) of Real Estate
When a property is sold, Spain taxes the capital gain — the difference between the sale price and the acquisition cost (including purchase costs and improvements, less depreciation).
🔵 For Non-Residents (IRNR)
Non-residents who sell Spanish property are also taxed in Spain on the capital gain.
| Rule | Description |
|---|---|
| Tax rate | 19% for all non-residents (EU and non-EU alike). |
| Withholding by buyer | Buyer must withhold 3% of the sale price and pay it using Form 211 within one month. |
| Seller’s declaration | Seller files Form 210 (type 28) within 3 months after that period to claim refund or pay extra. |
| Joint filing | Allowed for married couples. |
| Partial exemptions | 50% exemption for urban properties acquired between 12 May and 31 December 2012. |
✳️ Example – Non-Resident Selling in Spain
Mr. Ahmed Rahman, resident of Egypt, sells an apartment in Valencia.
| Sale price | €200,000 |
| Purchase price | €120,000 |
| Capital gain | €80,000 |
| IRNR tax (19%) | €15,200 |
| Buyer’s 3% withholding | €6,000 (Form 211) |
| Seller’s declaration (Form 210) | Pays remaining €9,200 |
If the buyer pays the 3% withholding, Mr. Rahman can offset it against his final tax liability.
✳️ Example – EU Resident and Reinvestment
Mrs. Sofia Lindström, Swedish resident, sells her habitual Spanish home for €400,000.
She reinvests €350,000 in another residence within 2 years.
→ As an EU resident, she qualifies for reinvestment exemption, and 87.5% of her gain is tax-free (350,000 ÷ 400,000).
🧾 Summary Table: Main IRNR and IRPF Differences
| Category | Spanish Residents (IRPF) | Non-Residents (IRNR) |
|---|---|---|
| Tax base | Worldwide income | Only Spanish-source income |
| Rental deductions | Yes | Only EU/EEA residents |
| Rates | Progressive (19–47%) | Flat: 19% (EU/EEA), 24% (others) |
| Imputed income | Yes | Yes (19%/24%) |
| Capital gains | Taxed at 19–28% | 19% flat |
| Reinvestment exemption | Yes | Yes, for EU/EEA residents |
| Forms used | 100 (annual IRPF) | 210, 211, 216, 296 |
