Non-Resident Taxes in Spain: IBI, IRNR, and Capital Gains Explained

Do you own a holiday home in Spain without being a resident? Then you need to be aware of three important types of taxes that apply to non-residents: IBI (municipal property tax), IRNR (state non-resident income tax via Modelo 210), and capital gains tax when selling the property.

Many foreign property owners overlook these obligations, which can lead to fines, interest charges, and even problems when selling the property.

This guide provides a complete overview of all three tax types, how they're calculated, when you must pay, and the consequences of non-payment.

---

Overview: The Three Taxes You Must Pay as a Non-Resident

As a non-resident property owner in Spain, you have three primary tax obligations:

| Tax Type | Who Pays? | Typical Amount | Deadline | |----------|-----------|----------------|----------| | IBI | All owners | €150-500/year | Municipal, typically Sept-Nov | | IRNR (Modelo 210) | Non-residents only | €150-300/year | December 31 of following year | | Capital Gains Tax | When selling | 19-23% of gain + municipal plusvalía | At time of sale |

Let's examine each tax type and what it means for you as a foreign property owner.

---

IBI - Municipal Property Tax

What is IBI?

IBI stands for Impuesto sobre Bienes Inmuebles (Tax on Real Estate) and is Spain's municipal property tax. It's somewhat similar to property taxes in other countries but typically lower.

Important: All property owners pay IBI - both residents and non-residents. It's a municipal tax, so rates vary between municipalities.

How IBI is Calculated

IBI is calculated based on the property's cadastral value (valor catastral), which is an official government valuation. The cadastral value is typically 40-60% of market value.

Formula:

IBI = Cadastral Value × Municipal Rate (0.4% - 1.1%)

Example:

| Item | Amount | |------|--------| | Cadastral Value | €150,000 | | Municipal Rate | 0.7% | | Annual IBI | €1,050 |

Most holiday home owners pay between €300-800 annually in IBI, depending on property size and location. Larger cities like Barcelona and Madrid generally have higher rates than smaller towns.

Payment and Deadlines

IBI is collected once yearly by your municipality. The deadline varies but is typically between September and November.

Payment Methods:

1. Direct Debit: The easiest way - set up automatic payment (domiciliación bancaria) from your Spanish bank account
2. Manual Payment: Pay at the bank or online with the received payment slip
3. Early Payment Discount: Many municipalities offer 5% discount for early payment

💰 Tip: Even with direct debit set up, check that payments go through. Technical errors can occur, and you remain responsible for timely payment.

What If You Don't Receive the Bill?

Many non-residents don't receive their IBI bill because the municipality sends it to an old address.

This does NOT exempt you from paying! You must be proactive:

• Call the municipal tax office (Ayuntamiento, departamento de tributos)
• Update your address
• Request electronic billing
• Consider using a fiscal representative

Consequences of Non-Payment

If you don't pay IBI on time:

| Consequence | Details | |-------------|---------| | Late Payment Surcharge | 5-20% depending on delay | | Interest | Approximately 3-4% annually | | Property Lien | Municipality can register a charge | | Sale Problems | IBI debt must be cleared before deed signing |

---

IRNR - Non-Resident Income Tax (Modelo 210)

What is IRNR?

IRNR stands for Impuesto sobre la Renta de No Residentes - Non-Resident Income Tax. This tax applies ONLY to non-residents and is based on "imputed income" from your property.

The concept: Spanish tax authorities assume you derive an economic benefit from owning property in Spain (even if you don't rent it out), and therefore tax this "fictional" income.

Who Must Pay IRNR?

✅ Non-residents with property in Spain ✅ Regardless of whether the property is for personal use or empty ✅ Also if the property is rented (but with different calculation)

You do NOT pay IRNR if:

• You're registered as a Spanish tax resident (more than 183 days/year)
• You pay regular Spanish income tax (IRPF)

How to Calculate IRNR - Step by Step

IRNR is calculated in two steps:

Step 1: Find the Taxable Base

This depends on when the property's cadastral value was last revised:

| Cadastral Revision | Calculation | |--------------------|-------------| | Revised after 1994 | Cadastral Value × 1.1% | | NOT revised after 1994 | Cadastral Value × 2% |

Step 2: Calculate the Tax

| Taxpayer Type | Rate | |---------------|------| | EU/EEA Citizens | 19% | | Non-EU Citizens | 24% |

Practical Example

Property Details:

• Cadastral Value: €120,000
• Cadastral revised in 2010
• Owner: EU citizen (non-resident)

Calculation:

1. Taxable Base: €120,000 × 1.1% = €1,320
2. IRNR: €1,320 × 19% = €250.80 annually

For most foreign holiday home owners, IRNR is between €150-400 per year.

Filing via Modelo 210

IRNR is reported and paid via "Modelo 210" form. This must be done digitally through the Spanish tax authority website (Agencia Tributaria).

Deadline: December 31 of the year following the tax year.

How to File:

1. Go to www.agenciatributaria.es
2. Select "Modelo 210"
3. Complete the form with:
   • Your NIE number
   • Property cadastral value
   • Property address and reference
4. Calculate the tax (system does it automatically)
5. Pay online via card or bank transfer

💡 Tip: Many non-residents use a gestor (tax administrator) or lawyer to handle this filing. It typically costs €50-100 annually but ensures everything is correct.

Special Rules for Rental Income

If you rent out your property, taxation changes significantly:

For EU/EEA Citizens:

• Rental income taxed at 19%
• You can deduct expenses (proportional to rental period)
• Filing must be done quarterly via Modelo 210

Example:

| Item | Amount | |------|--------| | Annual Rental Income | €12,000 | | Deductible Expenses | €6,000 | | Taxable Base | €6,000 | | Tax (19%) | €1,140 |

⚠️ Important: If you rent out your property, you also need a tourist license in most regions.

---

Capital Gains Tax When Selling

When you sell your Spanish property as a non-resident, two types of capital gains tax apply:

1. State Capital Gains Tax

The state capital gains tax is calculated on the profit from the sale.

Calculating the Gain:

Gain = Sale Price - Purchase Price - Documented Costs

Deductible Costs:

• Purchase costs (notary, registry, lawyer, transfer tax)
• Renovation expenses (with receipts!)
• Sale costs (agent, advertising)

Tax Rates (Progressive):

| Gain Amount | Tax Rate | |-------------|----------| | First €6,000 | 19% | | €6,001 - €50,000 | 21% | | Over €50,000 | 23% |

Example Calculation:

| Item | Amount | |------|--------| | Purchase Price 2015 | €200,000 | | Purchase Costs | €20,000 | | Renovations 2018 | €15,000 | | Sale Price 2024 | €300,000 | | Sale Costs | €10,000 | | Gain | €55,000 |

Tax Calculation:

• First €6,000 × 19% = €1,140
• Next €44,000 × 21% = €9,240
• Last €5,000 × 23% = €1,150
• Total: €11,530

2. Municipal Plusvalía (Land Value Increase Tax)

The municipal plusvalía taxes the assumed increase in land value (not the building) during your ownership period.

The calculation is complex and based on:

• Land's cadastral value
• Years of ownership
• Municipal coefficients

Typical amounts: €1,000-5,000 for an average holiday property after 10 years of ownership.

📋 Note: Following a 2021 Supreme Court ruling, you may avoid municipal plusvalía if you can prove there was no actual increase in land value.

The 3% Retention for Non-Residents

Here's an important detail many non-residents miss:

When selling, the buyer must withhold 3% of the sale price and pay it to the tax authority as an advance payment of your capital gains tax.

Example:

| Item | Amount | |------|--------| | Sale Price | €300,000 | | 3% Retention | €9,000 | | You Receive at Signing | €291,000 |

Within 4 months, you must file the actual sale via Modelo 210. Then you will either:

• Receive a refund if your actual tax is lower than the €9,000 retained
• Pay additional tax if your tax is higher

⏰ Important: The refund process can take 6-12 months. Plan your finances accordingly.

---

Annual Tax Calendar for Non-Residents

| Period | Obligation | |--------|------------| | April-May | Some municipalities collect IBI with early payment discount | | September-November | Most municipalities collect IBI | | December 31 | Deadline for Modelo 210 (IRNR for previous year) |

If Renting (Quarterly):

• January 1-20: Modelo 210 for Q4
• April 1-20: Modelo 210 for Q1
• July 1-20: Modelo 210 for Q2
• October 1-20: Modelo 210 for Q3

---

What Happens If You Don't Pay?

Spanish authorities have effective systems for tracking non-payment.

Consequences:

| Non-Payment | Consequences | |-------------|--------------| | IBI | 5-20% fines, interest, property lien, sale blocked | | IRNR (Modelo 210) | Fines from €100 to 50% of tax owed, interest, sale problems | | At Sale | Buyer must obtain tax compliance certificate; sale cannot proceed without it |

Statute of Limitations

• General limit: 4 years from deadline
• Example: IRNR for 2020 (deadline 31/12/2021) expires 31/12/2025

⚠️ Warning: Don't rely on the statute of limitations! Tax authorities can interrupt it by sending demands.

---

Should You Use a Fiscal Representative?

A fiscal representative handles your Spanish tax obligations on your behalf.

Advantages:

✅ Ensures timely payments and filings ✅ Keeps track of all deadlines ✅ Handles communication with Spanish authorities ✅ Alerts you to law changes ✅ Can sign documents on your behalf (with power of attorney)

When Is It Recommended?

Strongly recommended if:

• You don't speak Spanish
• You don't follow Spanish legislation closely
• You rent out your property
• You visit Spain infrequently

Costs:

| Service | Typical Cost | |---------|--------------| | Basic Fee | €150-250/year | | Modelo 210 Filing | €50-100/year | | IBI Follow-up | Often included | | Rental Accounting | €300-500/year extra |

For most foreign property owners, €200-300 annually is a sensible investment for peace of mind.

---

Practical Tips for Foreign Property Owners

1. Open a Spanish Bank Account

Makes life much easier:

• Automatic IBI payments
• Easier Modelo 210 payments
• Avoid currency conversion costs

2. Keep All Receipts

Especially important if you plan to sell:

• Purchase costs
• Renovation expenses
• Maintenance
• These can significantly reduce your capital gains tax

3. Check Your Cadastral Value

Visit Sede Electrónica del Catastro and verify:

• Valuation is correct
• When it was last revised (important for IRNR calculation)
• No unregistered changes

4. Consider Your Status

If you spend more than 183 days per year in Spain, you may be a tax resident without knowing it! This changes all your tax obligations.

5. Plan Sales Carefully

If considering selling:

• Start planning 6-12 months ahead
• Get the property valued
• Gather all documents
• Consider timing (tax year can matter)
• Remember: You won't receive all funds at signing (3% retained)

---

Frequently Asked Questions

Do I have to pay both IBI and Modelo 210?

Yes, these are two different taxes. IBI is municipal property tax (paid by everyone), while Modelo 210 (IRNR) is state non-resident income tax (only for non-residents). Both must be paid annually.

What happens if I forget to file Modelo 210 for several years?

You'll owe back taxes for the last 4 years (statute of limitations), plus fines up to 50% of tax owed and interest. You'll also have problems selling, as buyers need proof you're tax-compliant.

Do I have to pay tax even if I only use my property 2 weeks a year?

Yes, IRNR (Modelo 210) must be paid regardless of how much or little you use the property. The tax is based on ownership, not use. However, the amount is modest (typically €150-400 annually).

How does renting affect my taxes?

When renting, your actual rental income is taxed instead of imputed income. As an EU citizen, you can deduct expenses and pay 19% on the remainder. You must file quarterly via Modelo 210, and you need a tourist license in most regions.

Can I avoid the 3% retention when selling?

Only if you can document that you had no gain from the sale (i.e., a loss). You can then apply for exemption before deed signing. This requires extensive documentation and should be handled by a lawyer.

---

Conclusion

As a non-resident property owner in Spain, you have three primary tax obligations:

1. IBI: Municipal property tax (€150-500/year) - paid annually
2. IRNR (Modelo 210): State non-resident tax (€150-400/year) - filed annually by December 31
3. Capital Gains Tax: When selling - both state (19-23%) and municipal

These taxes aren't high compared to many countries, but the consequences of non-payment can be serious—especially when you want to sell.

Our Recommendations:

• Set up automatic IBI payments
• Use a gestor or fiscal representative for Modelo 210
• Keep all receipts from purchase and improvements
• Plan sales carefully to minimize capital gains tax

---

Need help navigating Spanish property taxes? Contact me for a consultation. I help foreign property owners manage their Spanish tax obligations.