Maximize Tax Benefits: A Comprehensive Guide to Non-Resident Property Owners Tax (Modelo 210)

So what is the non-resident tax and the Modelo 210?! Clients often get confused because we use the same modelo to submit both annual and quarterly information, but don't worry, we're here to explain it all.

The modelo 210 is a multi-purpose form allowing us to submit returns on various forms of income for non-resident property owners tax, including

  • rental income
  • capital gains on property sales
  • imputed income.

Let’s break these down a bit further, so you can see how each one applies to you.

Imputed income tax

Imputed income tax on property is commonly known as the “Non-Resident Property Owners Tax but in fact it is a tax on second homes and is payable by residents too if they have a second home in Spain or anywhere in the world, including the UK.

Theoretically, it’s a tax on the benefit of owning a second home.

The difference here is that residents pay the tax through their annual income tax declaration, but non-residents must submit their return and payment in the following calendar year. So for example, for the year 2018, the deadline for the return was the 31st of December 2019.

There are 2 levels of tax paid – 19%, by residents of EU countries and 24% by non-EU citizens. You need a certificate of fiscal residency each year if you’re a taxpayer in a European Country.

If the property is also owed by other people, such as a spouse, then each person has to submit a separate declaration and the figures to be paid, are adjusted according to the percentage you each own. So with two owners, you would each pay 50%.

The period of declaration is for the full calendar year. This means that if you’ve owned the property for less than a year, the payment is proportionate to the amount of time you have owned it.

Don’t forget that if you’ve sold a property, you must submit a return for the days in that year in which you still owned the property.

Even when you rent your property, either for holiday lets or long-term, you’re still required to submit the Modelo 210 for imputed income tax on the property for the empty days.

Properties rented out – short or long term

If you rent out your property you need to submit a quarterly declaration, Modelo 210, declaring the rental income during the year which you receive as income.

The income to be declared will be the whole amount received from the tenant or guest, without deducting any expenses.

In addition, for the times the property is empty, you’ll have to submit an imputed income return in the following year (as discussed above).

EU residents and Icelandic and Norwegian citizens can deduct the following expenses, which are directly connected to the letting of the property:

  • utilities including electricity, water, gas or phone
  • community fees
  • rubbish collection or local rates (IBI and Basura)
  • maintenance and repairs – which are not considered to be improvements
  • cleaning services or expenses
  • interest on mortgage (if applicable)
  • professional fees such as property management
  • Depreciation of buildings or fixed assets. Fixed Assets are classed as furniture and items that last for longer than one year and the corresponding depreciation is offset as a cost.
  • Improvements to the building such as new electrical installations, plumbing, reformations on the building etc. These must be detailed separately and the depreciation will be calculated accordingly.

A full invoice which includes the property owners details (full name, NIE, address of the property) and details of the Company issuing the invoice (full name, NIF/CIF, address), invoice number, date and description of service or item must be provided in order to deduct the expense.

Capital gains derived from the sale of property

The profit you make, or capital gain, as a result of the sale of a property, is considered an income and subject to tax. This income is understood to accrue when the capital change occurs, i.e. when you receive the profit from the sale. In general, the gain will be determined as the difference between:
  • the transfer price (reduced by the amount of any expenses and taxes inherent to the transfer paid by the seller)
  • and acquisition price – minus the 3% paid by the buyer via a modelo 211.
An example of a section of the online forms holiday home owners need to complete Non-Resident Property Owners Tax

There are some exemptions to this which we can help you with.

Completing the Modelo 210 for Non-Resident Property Owners Tax.

You can complete the form online yourself if you’re brave, but there are several calculations required that the form does not help you with,  so unless you really know what you’re doing, you could come unstuck. That’s why most people find it much easier to employ the services of an Asesoria, just like us!

We make it easy for you to send us the details needed, and remind you when it’s due.

We’ll send a simple form via our secure and GDPR-compliant site to collect the following information:

  • Spanish NIE number
  • Passport number
  • Date of Birth
  • Town of Birth (as per your passport)
  • Property ownership status – Sole/Joint (Married)/ Joint (partnership)
  • Country of Fiscal residence 
  • Address in your country of residence 
  • Full Address of the property or properties in Spain – including purchase date
  • Catastral reference number of Property in Spain (shown on the IBI bill)
  • An IBAN bank account number to include on the form so that you can pay directly from your bank
  • Email and telephone number

We also collect information on the status of your Spanish property.

We need different information depending on the status. 

Empty – we don’t collect a lot for this one!

Long-term rentals 

  • the tenant’s full name
  • NIE number
  • rental income

Short term rentals

  • How many days occupied per quarter
  • Quarterly income received
  • Quarterly expenditures
  • Any costs incurred in that quarter for maintenance: painting, cleaning, repairs, handling fee, replacing small items (bulbs, bed linen, curtains and etc.)
  • Assets purchases: tv, wardrobe, kitchen, sofa and etc.
  • Major repairs for the property: changing tiles, pipes, electric installation and etc.

We keep life simple!

It’s a very simple process as you can see. We send out 3 easy to use forms and you simply fill them in to give us the information so we can do the calculations and file the returns on your behalf.   

This obviously means you can complete the declaration without even being on the island and from the comfort of your home.

If you need any help at all with your non-resident property tax return please contact us or go ahead and book a consultation. 

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