Non-resident property owners must declare an “Imputed Income” on their Spanish property every year even though they do not generate any income from the property. The Spanish tax law requires filing an annual tax return to declare a deemed or "imputed" income on the property for the days during which the property has not been rented out during the calendar year. In other words, the Spanish tax legislation considers that any property that is not the habitual home is likely to generate income. The latter is also applicable to parking spaces and storage rooms.
This type of income is accrued once a year, on 31 December. The annual tax return for not rented properties must be submitted the following year and not later than 31 December. For example, imputed income accrued on 31st December 2021 must be declared within 2022.
If the property is partially rented, the imputed income should be declared proportionally.
Here you will find the most common situations where non-residents have to declare an “imputed income”.
- John has a property in Lanzarote which was used for only two months of the 2021 calendar year. For the rest of the year, the property was empty. John will have to declare an imputed income on the property as it was at his disposal and not rented for the whole 2021 calendar year whether the property is used or not. The tax return for the 2021 calendar year must be filed within 2022.
- In 2021, Petra and Markus spent 30 days in their second home in Mallorca. For the rest of the year, the property was rented out. They will have to declare in 2022 an imputed income for 30 days, that is during the period where the house was not rented. In addition, in 2021, they have to declare the rental income quarterly.
- Mats bought a property in Marbella on 15th November 2021. He did not rent the property nor use it until the end of the year. Mats must report in 2022 an Imputed Income from the purchase date to 31st December.
- Paul sold his property on 5 March 2021. Does he have to declare Imputed Income? Yes, in 2022 he must report an imputed income for the days during which the property was at his disposal in 2021, that is, from 1st January 2021 to 5th March 2021.
For non-rented properties, the taxable income is the result of applying an imputed percentage of 1.1% or 2% on the cadastral value of the property (“Valor Catastral”). The final percentage depends on the last cadastral value revision that has taken place in the municipality where the property is located.
The tax rate is 19% for EU tax residents and 24% for the rest. Tax residents in the UK can claim the 19% rate until the tax year 2020.
Let's answer that with an example.
Paul is a non-resident property owner who let his property in January 2021 and August 2021. The rest of the year the property was at his disposal but he only used it for short holiday periods.
Paul had to file three non-resident tax returns (forms 210):
- Form 210 for the first quarter of 2021 where he will declare rental income obtained from January to March. This Form 210 must be filed within the first 20 days of April 2021.
- Form 210 for the third quarter 2021 where he will declare rental income obtained from July to September. This Form 210 must be filed within the first 20 days of October 2021.
- Finally, he must file another Form 210 for the “imputed income” for the days during which the property was at his disposal. This third Form 210 must be filed at any time in 2022.
If the garage has its own local tax receipt (IBI) you will need to file a separate tax return for that property. According to the Spanish tax legislation, non-residents must file as many Forms 210 as properties and owners.
Yes, you do. Fortunately, our tax software allows you to complete up to 4 owners per property.
It depends on the type of declaration.
If the property is not rented out, it must be declared an imputed income once a year for the period of time during which the property has been available to the owner. Imputed income is declared the year after e.g. imputed income for 2020 must be declared in 2021. The tax deadline is 31st December, but IberianTax is only available until 20th December.
If the property is rented out, non-residents must declare rental income on a quarterly basis in the first 20 days of April, July, October and January with respect to the immediately previous quarter. IberianTax is only available until 15th April, July, October and January.
For example, If the property is rented out only in June 2020(second quarter), the owner must have filed a Form 210 in the first 20 days of July 2020. The days during which the property is not rented generate imputed income that is declared in the following year.
The Spanish tax authorities do not send you any reminders on this matter nor any information you need to act yourself!
However, if you are registered at IberianTax you will receive a reminder each tax period.