Real estate in Spanish territory that belongs to owners who do not have their official residence in Spain are declared in the Income Tax for Non-Residents (IRNR) and must be taxed through model 210 at the Tax Agency. The calculation and deadlines for filing this tax depend on whether the property has been at your disposal, has been rented, or has been sold.

PROPERTY FOR RENT

The income obtained from the rental of a house must be presented every three months (during the first 20 days of the months of January, April, July and October) and in a different model for each property. In addition, if the home has more than one owner, it must also be submitted separately.

In the event that the tax calculation is zero (there has been no positive income), the term is from January 1 to 20 of the year following the declared one.

The calculation of the tax base is made by deducting the following deductible expenses from the total income:

• Interest on mortgage or financing to acquire or improve the property.

• Interest or financing expenses for furniture and appliances.

• The costs of repair and conservation of the property. (If the total amount of these expenses is higher than the full income obtained, the excess may be deducted in the following four years)

• The costs of electricity, water and gas (if the owner pays them)

• Home insurance.

• The Real Estate Tax (IBI)

• The Garbage Tax (if it has not already been included in the community expenses)

• Community, security or porter expenses.

• Administrative expenses to formalize the rent and manage it later (real estate, agency and lawyer expenses)

• Amortization of construction (3% per year for 68 years) and of furniture and electrical appliances (10% per year for 20 years)

*If they are annual expenses, the proportion proportional to the rental period is calculated.*

*A tax rate of 19% is applied to the result of this calculation.*

*Those owners who do not belong to the European Union, Norway or Iceland cannot deduct these expenses and, in addition, they will be taxed at 24%.*

* In the IRNR it is not allowed to apply the reduction of 60% for rent for use as a habitual residence.*

REAL ESTATE RESERVED TO OWN USE

If the house is not for rent, either because its owner reserves it for his own use or because he has it empty, he must also declare it on form 210.

In this case, it would not be possible to deduct any housing expenses, and the full fee would be obtained by calculating 2% of the cadastral value of the construction (1.1% if the value has been revised in the previous 10 years) and applying it, subsequently , 19% tax (24% if it does not belong to the EU, Norway or Iceland).

[The updated cadastral value varies every year and is obtained from the Real Estate Tax (IBI) which, unlike this tax (which is state), is a municipal tax that is levied on the ownership of any type of property.]

The payment term for this tax here would be from January 1 to December 31 of the year following the declared one.

If there have been periods of the year in which the house has been rented (holiday rental, or long-term rental that has ended), this tax should be calculated on the number of days that it has not been for rent. In this way, it will be necessary to present this tax for each quarter that it has been rented, and again for the total period that it has been empty or available to the owner.

REAL ESTATE FOR SALE

If the owner decides to sell the property, he must pay taxes on the profit obtained, which will be calculated by the difference between the sale value and the purchase value (including the expenses and taxes of the two operations). In

addition, if the property has been rented, the total amount of the amortizations that have been discounted must be deducted from the purchase value.

The buyer is obliged to pay a retention of 3% of the sale value within one month from the signing of the sale. He will use form 211 and provide a copy to the seller so that he can deduct this withholding from his payment.

WEALTH TAX

If the value of the assets that a non-resident owner owns in Spanish territory is greater than 700.000 euros, he must also pay the Wealth Tax (IP) that is calculated by applying between 0,2% to 2,5%, minus deductions.

This tax is declared with form 714 and must be submitted from April 1 to June 30 of the

year following the one declared.