Tax Guide for Foreign Owners: Non-Resident Income Tax (IRNR)

Most of the private enquiries that come to our office in Mijas Costa have to do with the taxes that foreigners have to pay in Spain. If you want to know the taxes that affect you in Spain, follow this link and access to a complete guide.

Non-Resident Income Tax (IRNR)

If you are a foreigner with a property on the Costa del Sol, it is essential to understand your tax obligations in Spain, even if you are not permanently resident here. This article will guide you step-by-step through Non-Resident Income Tax (IRNR) and help you comply with the tax regulations in a simple and clear way.

What is the IRNR and who is affected?

IRNR is the tax levied on the income of people who are not tax resident in Spain, but who own property or generate income in the country. If you own property in Spain but spend less than 183 days a year here, you are considered a non-resident for tax purposes and will be taxed under this regime.

When do I have to pay IRNR?

You have to pay IRNR whether you rent your property or not. Even if you do not generate rental income, the simple fact of being a landlord means that you will have to declare a "presumptive rent", a kind of notional value for the potential use of the property.

Request a consultation with our experts to clarify any doubts or questions you may have. receive personalised advice on your tax obligations by clicking here.

How is the IRNR calculated?

There are two main situations:

1. If the property is not rented:
   • The tax is calculated on an imputed rent, which is a percentage of the cadastral value of the property. This percentage is usually 2%, but can be reduced to 1.1% if the cadastral value has been revised within the last ten years.
2. Practical example:
3. If your property has a cadastral value of €150,000 and has not been revised in the last decade, the imputed rent would be €1,650 (150,000 x 1.1%). On that amount, you will have to pay 19% if you are resident in the European Union or 24% if you are resident in a non-EU country (such as the UK after Brexit).
4. If you rent the property:
   • In this case, you will be taxed on the net income from the rent. If you are an EU resident, you can deduct expenses such as property tax, insurance, maintenance services, etc. If you are a non-EU resident, you cannot deduct these expenses and will pay tax on the gross income. If you are not an EU resident, you will not be able to deduct these expenses and will pay tax on the gross income.
5. Practical example of renting:
6. Suppose you rent your property for €12,000 per year and the deductible expenses amount to €3,000. If you are EU resident, you will be taxed on the remaining €9,000 (12,000 - 3,000) at 19%. However, if you are a UK resident, you will be taxed on the €12,000 at 24%.

Obligations and deadlines for filing the IRNR

The tax is declared through form 210, which must be filed annually if the property is not rented. If you rent it out, until 2023 it was compulsory to do so quarterly, but from 2024 a single declaration can be made at the end of the year.

It is crucial that you meet the deadlines to avoid penalties. You have until 31 December of the following year to file your return for the previous tax year.

Leave the filing of your IRNR in the hands of Meridional's experts and make sure you comply with your tax obligations without complications. Contact us here.

Disliked obligations: The IRNR

Owning a property in Spain, even if you are a non-resident, entails certain tax obligations that you cannot ignore. The IRNR is one of them and, depending on whether or not you rent out your property, the way it is calculated varies. It is always advisable to keep up to date with these regulations and, if in doubt, seek the support of a tax advisor to avoid problems with the tax authorities.

Meridional helps you with all taxes

Owning a property in Spain, even if you are a non-resident, entails certain tax obligations that you cannot ignore. The IRNR is one of them and, depending on whether or not you rent out your property, the way it is calculated varies. It is always advisable to keep up to date with these regulations and, if in doubt, seek the support of a tax advisor to avoid problems with the tax authorities.

Here you also have a full schedule of what taxes you have to pay if you are a foreigner in Spain.