Investment approach
Modelo 210: the annual non-resident tax return, even for an empty home
A non-resident who owns property in Spain must file a return on imputed income every year, even if the property is not let. The tax authority can claim missed years with interest and a penalty, so it is best to put them right before you sell.
A non-resident who owns a home in Spain files a Modelo 210 return every year, even if the flat stands empty and is not let. In that case the tax is charged on imputed income: a notional amount that the law treats as income from the mere fact of ownership.
A return is due even without rental income
Modelo 210 is the return form for IRNR, the non-resident income tax. It is filed when a property is sold and when it earns rental income, and foreign owners usually know that much. Many are unaware of the third case: the home simply belongs to a non-resident and is not let.
The tax is then charged on imputed income (renta imputada): usually 2% of the cadastral value, or 1.1% if the municipality has had a general cadastral revaluation that took effect in that year or in the previous ten years. The rate is 19% for EU and EEA residents and 24% for everyone else, and no expenses can be deducted (Agencia Tributaria).
What happens if you don't file
The tax authority can assess the tax for missed years that are still within the four-year limitation period, with late-payment interest and a penalty. A sale makes a non-resident more visible: the buyer pays 3% of the price over on Modelo 211, and the seller declares the gain on Modelo 210. So it is better to file the missing years yourself before selling: filing voluntarily, before the tax authority asks, costs less (see the questions below).
One form, several situations
Modelo 210 is filed in three situations: imputed income from an unoccupied home, rental income, and a capital gain on sale. Each is a separate filing with its own deadline.
The 3% withholding when you buy from a non-resident goes on a different form, Modelo 211. The buyer files it, and the amount withheld is then credited against the seller's Modelo 210 for the sale. The form and its instructions are on the Agencia Tributaria portal.
What this means for a DNPI investor
The obligation to file Modelo 210 on imputed income may already apply while a property is being renovated and earning no rent. We recommend checking this straight after purchase rather than leaving it until the sale.
Questions and answers
The property was bought through a Spanish company. Does Modelo 210 still need to be filed?
No. Modelo 210 is filed by non-residents without a permanent establishment in Spain, whether individuals or legal entities, that hold the asset directly. A Spanish company reports on separate corporate tax forms.
How much does filing Modelo 210 late cost?
It depends on whether the late filing was put right voluntarily before the tax authority asked for it, or picked up during an inspection. In the second case the interest and penalties are considerably higher. The tax authority sets the exact amount case by case.