Modelo 720 and 210: What Danish Property Owners in Spain Need to Know

If you own property in Spain or are a resident with assets in Denmark, you will sooner or later encounter two mysterious numbers: 720 and 210. These "modelos" (tax forms) are crucial for many Danes in Spain, but are often confused or misunderstood.

The difference is fundamental:

• Modelo 720 is a declaration of foreign assets for residents in Spain
• Modelo 210 is an annual non-resident tax for non-residents with Spanish property

Missing or incorrect reporting can result in significant fines - we're talking about penalties of up to 150% of the tax or assets owed. But with the right knowledge, it's relatively easy to comply with the rules.

In this guide, we'll go through both modelos in detail, explain who needs to report what, how the calculations work, and give you practical guides to correctly fill out the forms.

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Modelo 720 - Declaration of Foreign Assets

Modelo 720 was introduced in 2013 as a tool for Spanish tax authorities to combat tax evasion. The purpose is to ensure that residents in Spain report all their worldwide assets - not just the Spanish ones.

For many Danish residents in Spain, this means they must report their assets in Denmark: bank accounts, securities, properties, and more.

Who Must Report Modelo 720?

Modelo 720 must be reported by:

Tax Residents in Spain

You are a tax resident in Spain if:

• You stay more than 183 days in Spain during the calendar year
• Or your "center of vital interests" (family and economic center) is in Spain

With Foreign Assets Over €50,000

You only need to report if the value of your foreign assets in at least one of the three categories (see below) exceeds €50,000.

Exceptions:

You do NOT need to report if:

• You are a non-resident in Spain
• All your assets are in Spain
• Your foreign assets are under €50,000 in all three categories

What Must Be Declared?

Modelo 720 divides foreign assets into three categories:

1. Bank Accounts Abroad

All accounts in banks outside Spain, if the total balance exceeds €50,000:

• Checking accounts, savings accounts
• Time deposits
• Custodial accounts with banks
• PayPal and similar e-wallets (if balance over €50,000)

Valuation:

• Highest balance during the year, or
• Balance as of December 31
• Both must be reported, but the threshold is assessed on the highest balance

💡 Example:

• Bank account in Danske Bank: Highest balance in 2023: €75,000 (July), balance Dec 31, 2023: €45,000
• Must be reported: Yes (highest balance over €50,000)
• Reported: Both amounts

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2. Securities and Investments Abroad

All forms of securities and investments with foreign institutions, if total value exceeds €50,000:

• Stocks and bonds
• Investment funds (mutual funds)
• Pension savings (annuity pension, life annuity) - controversial
• Life insurance with investment element
• Options, futures, and other derivatives

Valuation:

• Market value as of December 31

⚠️ Special Note on Pension Savings:

This is controversial and legally unresolved:

• Spanish authorities believe Danish pension savings (annuity pension, life annuity) must be reported
• Many advisors believe inaccessible pensions should NOT be reported
• The EU Court has criticized parts of Modelo 720, but not this specifically
• Recommendation: Seek professional advice about your specific situation

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3. Real Estate Outside Spain

All real estate outside Spain, if total value exceeds €50,000:

• Homes (primary residence, vacation home, apartment)
• Commercial properties
• Undeveloped land
• Shares in properties

Valuation:

• Purchase price (if bought in the reporting year or year before)
• Or the highest of:
  • Latest public assessment (in Denmark: property valuation)
  • Latest purchase price

💡 Example:

• Property in Denmark bought in 2010 for 2,500,000 kr. (approx. €335,000)
• Public property valuation 2023: 3,200,000 kr. (approx. €430,000)
• Reported: €430,000

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4. Life Insurance

Life insurance taken out with foreign companies, if surrender value exceeds €50,000:

• Traditional life insurance
• Unit-linked insurance
• Pension insurance

Valuation:

• Surrender value as of December 31

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Deadlines and Reporting

Deadline: March 31

Modelo 720 must be reported by March 31 the year after the year the assets were acquired or the threshold was exceeded.

| Scenario | Deadline | |----------|----------| | In 2023 your Danish bank account exceeded €50,000 for the first time | March 31, 2024 | | You became tax resident in Spain in 2024 with existing assets | March 31, 2025 |

⚠️ Note: The deadline cannot be extended. It is absolute.

Digital Reporting (certificado digital)

Modelo 720 must be reported digitally via the Spanish tax authorities' website (Agencia Tributaria). This requires:

Certificado digital or Cl@ve PIN

• Certificado digital is an electronic signature
• Issued by approved authorities (FNMT)
• Can be complicated to obtain for foreigners
• Alternative: Cl@ve PIN via video identification

Many Use a Gestor or Lawyer:

Due to the technical complexity, most people use a gestor (accountant) or lawyer for the reporting:

• Cost: €150-400/year
• They have certificado digital
• Ensures correct completion
• Reduces risk of errors and fines

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First Time vs. Update

| Situation | What to Report | |-----------|----------------| | First time | All assets in the three categories must be declared when you first become resident or exceed the thresholds | | Subsequent years | Only if value has increased by more than €20,000 since last report, you've acquired new assets, or disposed of assets (must also be reported) |

💡 Example:

• 2022: Reported bank account with €75,000
• 2023: Balance is now €80,000 (increase €5,000)
• Must you report in 2024? No (increase under €20,000)
• 2024: Balance is now €96,000 (increase €21,000 total since 2022)
• Must you report in 2025? Yes (increase over €20,000)

This means many only need to report every 2-3 years if their assets are stable.

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EU Ruling 2022 and New Rules

Modelo 720 has been controversial since its introduction and has been subject to several EU cases.

EU Court Ruling January 27, 2022

The EU Court found that certain elements of Modelo 720 violated EU law:

Sanction System Declared Illegal:

The extremely harsh sanctions (minimum fine of €10,000 + 150% of asset value) were considered disproportionate and in breach of free movement of capital.

Statute of Limitations:

The fact that non-reporting meant assets were treated as "undeclared income" without statute of limitations was also overruled.

What Applies Now?

After the ruling, Spain has partially reformed Modelo 720:

| Aspect | Before | After (from 2023) | |--------|--------|-------------------| | Missing/late reporting | 150% of asset value | €100 per undisclosed data, min €1,500 | | Incorrect information | €5,000 per error | €250 per error, min €1,500 | | Maximum fine | Unlimited | 2% of asset value or €20,000 (highest) | | Statute of limitations | Unlimited | 4 years (normal) |

This is significantly milder than before, but still substantial.

⚠️ Note: Despite the EU ruling, Modelo 720 still exists, and the reporting obligation remains. Only the penalties have been reduced.

Practical Consequence:

If you have failed to report in previous years:

• The risk is now lower than before
• But you should still correct it
• Voluntary late reporting reduces fines
• Seek professional advice about your specific situation

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Modelo 210 - Non-Resident Tax on Property

While Modelo 720 applies to residents, Modelo 210 is relevant for non-residents with Spanish property.

Who Must Pay Modelo 210?

Non-Residents with Spanish Property

Modelo 210 must be paid by:

• Persons who are NOT tax resident in Spain
• Who own real property in Spain
• Regardless of whether the property is used privately or rented out

| Situation | Must Pay Modelo 210? | |-----------|---------------------| | Dane living in Denmark with vacation home in Spain | ✅ Yes | | Dane resident in Spain with home in Spain | ❌ No (pays regular IRPF) | | Danish resident in Spain with vacation home in France | ❌ No (not Spanish property) |

⚠️ Important: Modelo 210 only applies to non-residents. If you are a resident, you pay regular income tax (IRPF) on imputed income.

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The Difference from IBI

Many confuse Modelo 210 with IBI. They are NOT the same:

| Aspect | IBI | Modelo 210 | |--------|-----|------------| | Full name | Impuesto sobre Bienes Inmuebles | Impuesto sobre la Renta de No Residentes | | Type of tax | Property tax (wealth) | Income tax (imputed or actual) | | Who pays | ALL owners (resident + non-resident) | Only NON-RESIDENTS | | Authority | Municipal (Ayuntamiento) | State (Agencia Tributaria) | | Basis | Cadastral value | Imputed income (1.1% of cadastral) | | Rate | 0.4-1.1% of cadastral | 19% of imputed income | | Typical amount | €200-800/year | €200-500/year | | Collection | Municipality sends bill | Owner must self-report | | Deadline | Varies (typically Sep-Oct) | December 31 the year after |

You Must Pay Both if you are a non-resident owner:

• IBI to the municipality
• Modelo 210 to the state

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Calculating the Tax

Modelo 210 is calculated based on an imputed income (fictitious rental income), even if you don't rent out the property.

Formula for Private Use (Not Rented):

1. Find the Cadastral Value

• Appears on the IBI bill
• Or look up at sede electrónica del catastro (online)

2. Calculate Imputed Income:

| If Cadastral Value Was... | Imputed Income | |---------------------------|----------------| | Revised after 1994 | Cadastral Value × 1.1% | | NOT revised after 1994 | Cadastral Value × 2% |

(Most areas have revised values, so 1.1% is most common)

3. Calculate the Tax:

| Taxpayer | Tax Rate | |----------|----------| | EU citizens (incl. Danes) | Imputed Income × 19% | | Non-EU citizens | Imputed Income × 24% |

Combined Formula for Danish Non-Residents:

Tax = Cadastral Value × 1.1% × 19%

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Example Calculation

Situation:

• Danish vacation home owner (non-resident)
• Property in Málaga
• Cadastral value: €120,000 (revised after 1994)
• Property used privately (not rented)

Calculation:

| Step | Amount | |------|--------| | Cadastral value | €120,000 | | Imputed income (1.1%) | €1,320 | | Tax (19%) | €250.80/year |

Alternative with Higher Value:

| Step | Amount | |------|--------| | Cadastral value | €250,000 | | Imputed income (1.1%) | €2,750 | | Tax (19%) | €522.50/year |

💡 Note: This is a relatively modest annual tax - typically €200-600 for normal vacation homes.

Comparison with IBI:

Same property (cadastral €120,000):

• IBI (approx. 0.5%): €600/year
• Modelo 210: €251/year
• Total annual taxes: €851

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Deadlines and Payment

Annual Reporting

Modelo 210 must be reported and paid once annually for the previous year.

Deadline: December 31 the Year After

| Income Year | Deadline | |-------------|----------| | 2023 | December 31, 2024 | | 2024 | December 31, 2025 |

Practical: Most report in January-March, even though the deadline is in December.

Payment Methods:

| Method | Description | Cost | |--------|-------------|------| | Digital reporting (recommended) | Via Agencia Tributaria's website, requires certificado digital or Cl@ve PIN | Free | | Via Spanish bank | Some banks help with completion and payment (requires account) | €30-50 | | Via gestor or lawyer | Most non-residents use a gestor, includes completion and payment | €80-150/year |

💡 Recommendation: If you don't have a Spanish bank account or certificado digital, a gestor is the easiest solution.

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Do You Rent Out Your Property?

If you rent out your Spanish property, the taxation changes significantly.

Rental Income Must Be Reported

Instead of imputed income, you must report actual rental income:

Gross Income: All received rental payments

Deductions (only for EU citizens):

As a Dane (EU citizen), you are entitled to deduct operating expenses:

• Maintenance and repairs
• Insurance
• Property taxes (IBI)
• Community fees (comunidad)
• Utilities (if you pay them)
• Depreciation: 3% of property value annually

Non-EU citizens: CANNOT deduct expenses (taxed on gross)

Taxation:

| Taxpayer | Tax | |----------|-----| | EU citizens | Net income × 19% | | Non-EU citizens | Gross income × 24% |

💡 Example:

Dane rents out Costa del Sol apartment:

• Rental income: €18,000/year
• Expenses: IBI €600 + Community €1,200 + Insurance €400 + Maintenance €1,500 + Depreciation €3,000 = €6,700
• Net income: €11,300
• Tax (19%): €2,147

If same person were non-EU citizen:

• Gross income: €18,000
• No deductions
• Tax (24%): €4,320

The difference is significant.

Quarterly Reporting

If you rent out, you must report quarterly:

| Quarter | Period | Deadline | |---------|--------|----------| | Q1 | Jan-Mar | April 20 | | Q2 | Apr-Jun | July 20 | | Q3 | Jul-Sep | October 20 | | Q4 | Oct-Dec | January 20 (following year) |

⚠️ Important: If you rent via Airbnb or Booking.com, the platform is obligated to report your income to authorities. Non-reporting is therefore almost always discovered.

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What Happens If You Don't Report?

Missing or incorrect reporting of Modelo 720 or 210 can have serious consequences.

Modelo 720 - Fines and Consequences

New Fines (after EU ruling 2022):

| Violation | Penalty | |-----------|---------| | Missing reporting | €100 per undisclosed data, min €1,500, max 2% of asset value or €20,000 | | Late reporting | Same as missing (can be reduced with voluntary correction) | | Incorrect information | €250 per error, min €1,500 |

💡 Example:

You have a Danish bank account of €100,000 and property in Denmark worth €300,000, which you haven't reported.

• Two categories not reported (2 data points)
• Minimum fine: €1,500
• Alternatively: 2% of €400,000 = €8,000
• Actual fine: €8,000 (the highest)

Before EU ruling the sanction was:

• Minimum €10,000
• Plus 150% of asset value = €600,000
• Total: €610,000 (completely insane)

Even though fines are reduced, they are still significant.

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Modelo 210 - Fines and Consequences

Missing Reporting:

If you haven't reported Modelo 210 for several years:

| Penalty | Amount | |---------|--------| | Missing reporting | 50% of tax owed (can be reduced to 25% with voluntary correction) | | Late reporting | 5-20% depending on delay | | Interest | Daily interest from due date, typically 3-4% annually |

💡 Example:

You haven't reported Modelo 210 for 3 years:

• Annual tax: €300
• Total tax owed: €900
• Fine (50%): €450
• Interest (3 years, approx. 4%/year): approx. €110
• Total: €1,460

Lien on Property:

If you don't pay:

• Tax authorities can place a lien on the property
• Upon sale, owed tax + fines + interest are withheld
• This can cause unpleasant surprises when selling

⚠️ Practical: Many non-residents first discover their missing reports when selling the property, and the notary checks for tax debt.

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Statute of Limitations

| Tax Form | Statute of Limitations | |----------|----------------------| | Modelo 720 | 4 years (after EU ruling) | | Modelo 210 | 4 years from reporting deadline |

💡 Note: Even though there is a statute of limitations, it is strongly recommended to voluntarily correct missing reports. Fines are significantly reduced with voluntary correction.

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Step-by-Step: How to Report

Let's go through the practical process for reporting both modelos.

Modelo 720 - Practical Guide

Step 1: Gather Documentation

For each asset category you need:

| Category | Documentation Needed | |----------|---------------------| | Bank accounts | Account statements for the whole year, highest balance during year, balance as of Dec 31, bank name/address/account number (IBAN) | | Securities | Depot overview as of Dec 31, institution name and address, detailed list of holdings | | Real estate | Purchase contract or deed, latest public assessment (property valuation), address and land registry data |

Step 2: Calculate If You Must Report

For each category:

• Does the value exceed €50,000? Yes → Must be reported
• Has the value increased by over €20,000 since last report? Yes → Must be reported

Step 3: Get Certificado Digital

If you don't have one:

• Apply via FNMT (Fábrica Nacional de Moneda y Timbre)
• Requires personal appearance
• Alternative: Use Cl@ve PIN (video identification)
• Or hire a gestor with certificado

Step 4: Fill Out Form Online

Log in to Agencia Tributaria:

• Choose "Modelo 720"
• Fill in personal data (NIE, name, address)
• Select relevant categories (accounts/securities/real estate)
• Enter all information for each asset
• Review and confirm

Step 5: Submit by March 31

• Generate confirmation (justificante)
• Store confirmation safely
• If errors discovered later: Submit correction (complementaria)

💡 Practical Recommendation:

Most Danes find it easiest to use a gestor:

• You send documentation (account statements, property papers)
• Gestor fills out and submits
• You receive confirmation
• Cost: €150-400/year (depends on complexity)

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Modelo 210 - Practical Guide

Step 1: Find Your Cadastral Value

• Check your IBI bill (appears at bottom)
• Or look up at https://www.sedecatastro.gob.es
• Enter property address
• Note cadastral value (valor catastral)

Step 2: Calculate the Tax

| Usage | Calculation | |-------|-------------| | Private use (not rented) | Cadastral Value × 1.1% = Imputed Income → Imputed Income × 19% = Tax | | Rental | Rental Income - Deductible Expenses = Net Income → Net Income × 19% = Tax |

Step 3: Fill Out Form

Digital method (requires certificado digital):

1. Log in to Agencia Tributaria
2. Choose "Modelo 210"
3. Choose "Imputación de rentas inmobiliarias" (for private use) or "Rentas obtenidas sin establecimiento permanente" (for rental)
4. Enter property data (reference catastral, address)
5. Enter calculated income
6. Generate payment document (modelo 210 justificante)

Via Gestor:

• Send cadastral value and any rental income
• Gestor fills out and generates payment document
• Cost: €80-150/year

Step 4: Pay the Tax

• Pay via European bank transfer
• Or via Spanish bank account
• Payment information appears on justificante
• Deadline: December 31 the year after

Step 5: Store Documentation

• Keep paid modelo 210 for minimum 4 years
• When selling property, you may need to show receipts for paid Modelo 210 for recent years

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When Should You Use an Advisor?

Even though the forms can theoretically be filled out yourself, there are many situations where professional help is a good investment.

Modelo 720 - Consider an Advisor If:

| Situation | Why Professional Help? | |-----------|----------------------| | Complex asset situations | Multiple bank accounts in different countries, large securities portfolios, pension savings (legal gray area), multiple properties | | First-time reporting | Ensures correct completion from the start, avoids expensive errors | | Missing certificado digital | Difficult to obtain as a foreigner, gestor already has one | | Uncertainty about pension savings | Should annuity pension be reported? Legally unclear area |

Cost:

• First time: €300-500 (more work)
• Subsequent: €150-300/year
• If no changes: Can be free (only pay if new reporting needed)

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Modelo 210 - Consider an Advisor If:

| Situation | Why Professional Help? | |-----------|----------------------| | Rental of property | Calculation of deductions, quarterly reporting (4 times/year), expense documentation | | Multiple properties | Each property must be reported separately | | Missing Spanish bank account | Payment can be complicated, gestor can pay for you | | Forgot to report in previous years | Voluntary correction requires correct handling, reduces fines |

Cost:

• Private use, one property: €80-150/year
• Rental, one property: €200-400/year (incl. quarterly reports)
• Multiple properties: €100-150 per additional property

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Frequently Asked Questions

Do I need to report Modelo 720 if I have under €50,000?

No. The €50,000 threshold applies per category:

• Bank accounts under €50,000 total: Does not need to be reported
• Securities under €50,000 total: Does not need to be reported
• Real estate under €50,000 total: Does not need to be reported

⚠️ But beware:

• If bank account has been over €50,000 at any point during the year (even one day), it must be reported
• The threshold is assessed on the highest value, not just the year-end balance

Can I report Modelo 720 and 210 myself?

Theoretically yes, but in practice professional help is recommended:

| Form | Self-Reporting? | |------|----------------| | Modelo 720 | Difficult - requires certificado digital, complex Spanish form, legal gray zones (pension), high fines for errors | | Modelo 210 (private use) | Possible - can be filled out online via Cl@ve PIN, relatively simple calculation | | Modelo 210 (rental) | Difficult - use professional |

What if I forgot to report in previous years?

You have three options:

| Option | Description | Recommendation | |--------|-------------|----------------| | Voluntary correction | Submit missing Modelo 720/210 via "declaración complementaria", pay owed tax + reduced fine + interest | ✅ Recommended | | Wait and hope | Risk authorities discover it, higher fines, possible lien on property | ❌ Strongly discouraged | | Ignore it | After 4 years claim lapses (after EU ruling), but risk in meantime is high | ❌ Strongly discouraged |

Is Modelo 720 legal after the EU ruling?

Yes, Modelo 720 still exists and the reporting obligation remains.

What the EU ruling changed:

1. Sanctions were reduced (from 150% of asset value to max 2% or €20,000)
2. Statute of limitations (from unlimited to 4 years)
3. Reporting obligation: Unchanged - you must still report

What happens when selling property?

When selling Spanish property as a non-resident:

| Requirement | Description | |-------------|-------------| | Modelo 210 | Notary will check if you've paid Modelo 210 for recent years - missing payments must be settled before sale | | 3% withholding | Buyer must withhold 3% of sale price, paid to tax authorities as security for your capital gains tax | | Capital gains tax | Must be paid on gain (sale price - purchase price - costs), rate 19-23% (progressive) | | Municipal plusvalía | Municipal tax on land value increase, paid by seller | | IBI | Must be paid up to date |

Do I have to pay IBI and Modelo 210 if the property is for sale?

Yes. Both taxes are paid by the owner, regardless of whether the property is for sale.

Can I get Modelo 210 refunded if the property stands empty?

No. Modelo 210 is based on imputed income - meaning a fictitious value of owning the property.

It doesn't matter if:

• The property stands empty
• You never use it
• It's for sale
• It's under renovation

Spain sees property ownership as a "value" in itself. Therefore you must pay tax, even if you don't use or rent it out.

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Conclusion

Modelo 720 and 210 are two different taxes with different purposes, but both are important to understand and comply with for Danes connected to Spain.

Summary

| Form | Who | What | Deadline | Typical Cost | |------|-----|------|----------|--------------| | Modelo 720 | Residents in Spain | Reports foreign assets over €50,000 | March 31 | Use professional (€150-400) | | Modelo 210 | Non-residents with Spanish property | Annual tax on imputed income | December 31 (year after) | €200-500/year + consider gestor (€80-150) |

Most Important Advice

1. Understand your status: Are you resident or non-resident? This determines which taxes apply.

2. Meet deadlines:

   • Modelo 720: March 31
   • Modelo 210: December 31 the year after
   • Set reminders well in advance

3. Use professional help:

   • Modelo 720: Almost always recommended
   • Modelo 210: Recommended for rental or multiple properties
   • Cost of €150-400/year is a good investment

4. Store documentation:

   • For minimum 4 years
   • Digital backup in the cloud
   • When selling you may need to show years back

5. Correct errors voluntarily:

   • If you forgot to report
   • Do it yourself (reduces fines)
   • Don't wait for authorities to discover it

Final Note

Spanish tax can seem complex and bureaucratic compared to the Danish system. But with the right knowledge and professional help, it's manageable.

The key is:

• Understand the rules
• Meet deadlines
• Seek help when necessary
• Store documentation

The annual costs (IBI + Modelo 210 + gestor) for a typical vacation home are €1,500-2,500/year. Budget this from the start, and there are no surprises.

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Do you need help with Modelo 720 or 210?

At Buxton Gefke Law we help Danes with:

• Clarification of which modelos you need to report
• Contact with reliable gestores in your region
• Legal advice on complex situations
• Voluntary correction for missing reports
• General tax advice for Spain residents

Contact us for a non-binding conversation.

Christian Gefke Spanish Lawyer Buxton Gefke Law contact@buxtongefke.es +34 952 000 000