Rental & Non Resident taxes

In ConsultInfo, we know that being a property owner in Spain entails tax responsibilities that go beyond a simple rental. We offer a comprehensive service for filing all your tax returns, both those related to the rental income from your property and the annual declaration of the Non-Resident Income Tax (IRNR).

1. Filing the Tax on Rental Income from your Property

The declaration of income obtained from the rental of your property (Form 210, Income Type 01) must be filed with rigorous deadlines if you opt for the quarterly modality (regime applicable before the switch to annual filing):

Non-Resident Tax (General): The Mandatory Annual Fee

Before discussing rental, it is crucial to understand the basic tax obligation: the Non-Resident Tax for having the property at your disposal.

The Non-Resident Income Tax (IRNR) has an essential characteristic: it must be paid even if you have not rented your property. This tax levies the mere ownership of an urban property that is at your disposal in Spanish territory. It does not declare actual income, but rather an imputed real estate income (Form 210, Income Type 02).

This imputed income is calculated by applying a percentage (generally 1.1% or 2% of the cadastral value) to the value of the property for the time it was not rented. This declaration is annual, with a filing deadline of up to December 31 of the year following the tax year in which the income is imputed.

If you do not rent at all, you must file Form 210 annually.

Double Declaration: The Non-Resident Who Rents

Here lies the main source of confusion and tax errors for non-resident owners. If you are a non-resident and obtain rental income, you have a double tax obligation to comply with:

1. Declaring rental income (Quarterly/Annual, Actual Income): You must declare the effective yield (income minus deductible expenses) for the days the property was rented. This is done using Form 210, following the applicable deadlines (quarterly or the new annual period).
2. Declaring the vacant property (Annual, Imputed Income): For the time the property was not rented and was at your disposal (for example, when you used it for holidays or it was vacant awaiting a tenant), you must declare the imputed real estate income (Form 210, Income Type 02), as explained before.

That is, in the same fiscal year, a non-resident who rents and uses their property vacant in different periods must file: Multiple declarations for rental income (quarterly or a grouped annual one, according to current regulations) AND a final declaration for imputed income for the unrented days.

Consequences of Tax Negligence

No one stops to think that filing taxes on time can avoid unnecessary tax inspections or sanctions. Surprisingly, many believe that the Tax Agency will not notice them. This is a “let’s hope for the best” mindset that must be avoided. No, friends!

The Tax Agency is already sending “luck letters” (known as requerimientos or compliance notifications) to owners who did not even rent their property, but simply came to enjoy a vacation in sunny Spain. These letters contrast the ownership of the property with the lack of mandatory annual declarations (Imputed Income).

Consequences for Non-Compliance:

• Sanctions for not declaring Imputed Income (Vacant Property): By not filing the annual Form 210 (Imputed Income), the Tax Agency can initiate a settlement procedure, imposing a sanction that can range between 50% and 150% of the unpaid amount, plus late interest.
• Surcharges for Late Filing: Failure to file quarterly rental forms on time results in surcharges for late declaration ranging from 5% to 20% of the payable amount, depending on the delay time, without prior request from the Administration.
• Immigration Issues: For those wishing to obtain or renew a residency permit, demonstrating compliance with tax obligations as an owner (including IRNR declarations for rental and imputed income) is a crucial requirement.

Do not delay! We will free you from fines for late filing of declarations with an attractive price for the preparation and submission of returns. Pay your taxes and live in peace!

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