Non-Resident Tax (IRNR): Rental Income and Property Sales
The "Resident or non-resident" guide already covered the basics: a non-resident pays IRNR only on Spanish-sourced income. This page goes into the detail that matters most in practice, because property is where the mistakes happen - missing a quarterly Modelo 210 on rental income, forgetting that an empty holiday flat is still taxed, or finding out about the 3% withholding only at the notary when selling.
Contents
- Who owes IRNR, and on what
- Rental income: rates, deductions and Modelo 210 deadlines
- Imputed income: tax on a property that just sits there
- Selling property: the 3% withholding and capital gains tax
- How to reclaim an overpayment
Who owes IRNR, and on what
IRNR (Impuesto sobre la Renta de No Residentes) is owed by anyone who is not a Spanish tax resident under the tests covered in the resident-or-non-resident guide, but who earns income from a Spanish source - most commonly, property owners: a flat on the Costa del Sol bought years ago and rented out over the summer, or a holiday home kept “for later” and never rented out at all. Both cases are taxed, just under different rules.
Non-resident income tax is governed by the consolidated text of the law, RDLeg 5/2004 (TRLIRNR), and its regulation RD 1776/2004. This page focuses on property specifically, since it is the most common and the most error-prone source of non-resident income. The general rate logic - 19% for EU/EEA/Norway, 24% for everyone else, including the US and the post-Brexit UK - was already covered in the residency guide; this page is about the mechanics: how the tax base is calculated, when and on what form to file, and what happens on a sale.
Rental income: rates, deductions and Modelo 210 deadlines
If the property is rented out, IRNR is calculated on the income received, filed separately each quarter:
- EU, EEA and Norwegian tax residents pay 19% on the net amount (rate under art. 25 TRLIRNR, right to deduct under art. 24.6 TRLIRNR) - deducting expenses directly tied to renting it out: mortgage interest, repairs, home insurance, utility costs during vacant periods between tenants, community fees, depreciation.
- Residents of other countries, including the US and the UK, pay 24% on the gross rental amount (the general rate under art. 25 TRLIRNR), with no deductions at all, even where upkeep costs were substantial.
The declaration is filed on Modelo 210, quarterly, within the first 20 days of the month following each quarter:
| Period | Filing window |
|---|---|
| Q1 (January - March) | 1-20 April |
| Q2 (April - June) | 1-20 July |
| Q3 (July - September) | 1-20 October |
| Q4 (October - December) | 1-20 January of the following year |
If the property is only rented for part of the year - a typical summer-let pattern - the return is still filed per the quarter income was actually received, not as a single annual figure the way imputed income is (see below). Missing a quarterly filing draws a penalty and interest even on modest rental amounts - Hacienda makes no allowance for “not worth reporting” sums.
A common mistake: paying the tax but skipping the form
It is common for an owner to transfer money aside or estimate the tax owed “informally,” without actually filing Modelo 210 itself - that does not avoid the penalty for a late or missing filing, even if the tax happens to have been paid. The filing penalty is assessed separately from the tax itself and increases with every month it stays outstanding.
Imputed income: tax on a property that just sits there
The most common surprise for a non-resident owner: even if a property is not rented out - used only for personal visits, or simply left vacant - it is still subject to an imputed-income tax (renta imputada). The logic is that owning property is treated as a form of economic benefit in itself, taxed on a notionally calculated amount rather than on actual income, because there is none.
The obligation itself sits in art. 13.1.h) TRLIRNR, and the calculation of the base follows the property-income rules in the personal income tax law (art. 85 LIRPF). The tax base is a percentage of the cadastral value (valor catastral) - the figure shown on the IBI (local property tax) bill:
- 2% is the default rate for most properties.
- 1.1% applies if the cadastral value was updated through a collective cadastral revision within roughly the last 10 years - the Agencia Tributaria publishes the exact list of municipalities with a qualifying revision for each tax year, so this needs checking against the specific address rather than assumed.
The resulting base is taxed at the same IRNR rate as rental income (19% or 24%, depending on the owner’s country of tax residency), but with no deductions whatsoever - unlike rental income, no expenses can be deducted here at all, even for EU/EEA residents.
The imputed-income return is filed once a year, on the same Modelo 210 form, by 31 December of the year following the tax year in question.
How the calculation works if there is no registered cadastral value
If a property has no registered cadastral value on the relevant date, the 1.1% rate applies instead to 50% of the higher of two figures: the acquisition price, or the value assigned for other tax purposes. This is a fairly rare case (typically new-build property not yet entered into the cadastral register), but it does come up for buyers of newly completed developments.
Selling property: the 3% withholding and capital gains tax
Selling property as a non-resident involves a separate mechanism that often catches sellers off guard at the notary’s office: the buyer is required to withhold 3% of the agreed sale price and pay it to Hacienda (art. 25.2 TRLIRNR, procedure in art. 14 RD 1776/2004) - not an extra tax, but a security deposit against the seller’s eventual capital gains liability. The logic mirrors similar rules in other countries: if a non-resident seller leaves the country right after closing, collecting the tax afterwards is far harder.
The mechanics:
- At completion before the notary, the buyer withholds 3% of the price and does not pass that amount to the seller.
- Within 1 month of completion, the buyer files Modelo 211 and pays the withheld amount to Hacienda.
- The seller separately calculates the actual capital gains tax owed - 19% of the real profit (the difference between sale price and acquisition price, adjusted for deductible costs, see below) - and this rate is the same for every non-resident, regardless of country, unlike rental income and imputed income, where the rate depends on EU status.
- If the withheld 3% exceeds the actual tax owed - or the sale was at a loss - the difference can be reclaimed, or refunded in full if there was no gain at all.
What can be deducted when calculating the capital gain
The taxable base allows deducting: the original acquisition price, purchase and sale costs (notary, land registry, agent’s commission), the property transfer tax paid on acquisition, the municipal capital gains tax on land value (plusvalía municipal), and documented costs of capital improvements - but not routine maintenance. It is worth keeping receipts and contracts for all of these from the moment of purchase, rather than starting to hunt for documentation once a sale is already scheduled.
UK sellers since Brexit, and what stays the same
The 24% non-EU rental rate that applies to UK owners since Brexit (see the residency guide for the pending Audiencia Nacional challenge to that gap on rental deductions) does not carry over to a property sale: the 19% capital gains rate on a sale is identical for UK, US and EU sellers alike. The rate difference by nationality only applies to ongoing rental income and imputed income, not to the one-off gain on selling.
How to reclaim an overpayment
If the 3% withheld on a sale exceeds the actual tax owed, the seller files their own Modelo 210 showing the real capital gains calculation and claims the difference as a refund. In practice this is a separate, self-initiated filing - Hacienda does not refund the difference automatically, only on request.
The filing deadline is 3 months after the buyer’s own deadline for paying in the 3% withholding expires (so roughly 4 months from completion in total). Actual refund timelines run noticeably longer than the formal review period - in practice, budget for several months, sometimes over a year, particularly if Hacienda requests further documentation on the deductible costs claimed.
A US citizen's rental income also needs reporting to the IRS
A US citizen renting out Spanish property files IRNR in Spain the same way any other non-EU owner does - 24% on the gross rent, quarterly, via Modelo 210. That obligation exists independently of, and in addition to, US tax rules: US citizens report the same rental income on Schedule E of Form 1040 regardless of where they live, and typically claim a foreign tax credit for the Spanish tax already paid rather than being taxed twice on the same income. The Spanish IRNR filing and the US filing are two separate obligations that need tracking in parallel, not one substituting for the other.
The same overpayment-reclaim mechanism applies to the quarterly rental filing: if, in a given quarter, deductible expenses exceeded rental income (relevant mainly for EU/EEA owners, who are the only ones entitled to deductions in the first place), the resulting overpayment can also be reclaimed through a separate filing.
Frequently asked questions
What tax rate applies to rental income for a non-resident?
EU, EEA and Norwegian tax residents pay 19% on net rental income, deducting property-related expenses (upkeep, repairs, insurance, mortgage interest, community fees). Residents of other countries, including the US and the UK (non-EU since Brexit), pay 24% on the gross rental amount, with no deductions allowed.
Do I owe tax if the property just sits empty and is not rented out?
Yes. If a property is not rented out and is not your main home, an imputed-income tax (renta imputada) applies - a fixed percentage of the cadastral value, declared once a year, even though no actual income was ever received.
Is the imputed income rate 1.1% or 2% of cadastral value?
The default rate is 2% of cadastral value. The reduced 1.1% rate applies if the cadastral value was updated through a collective cadastral revision within roughly the last 10 years - the Agencia Tributaria publishes the exact list of municipalities with a qualifying revision for each tax year.
How often do you file Modelo 210?
It depends on the type of income. Rental income is filed quarterly, within the first 20 days of the month after each quarter (so in April, July, October and January). Imputed income on a property kept for personal use is filed once a year, by the end of the following calendar year. A property sale is filed separately, within 3 months after the deadline the buyer had to pay in the 3% withholding.
What is the 3% withholding on a property sale by a non-resident?
The buyer is required to withhold 3% of the agreed sale price and pay it to the tax authority within one month of completion - a guarantee that a non-resident seller does not leave the country without paying capital gains tax. If the actual tax (19% of the real gain on the sale) turns out to be lower than the 3% withheld, the difference can be reclaimed by filing Modelo 210.