Non-Resident Tax in Spain for UK Property Owners

Even if your Spanish property is never rented, Spain treats it as generating a notional “imputed income” and taxes you on it. This may seem odd from a UK perspective, but it is standard in Spanish tax law.

The calculation is straightforward:

1. Find your property’s valor catastral (cadastral value) — this is printed on your annual IBI bill from the town hall. It is typically 30–60% of the market value.
2. Multiply by 1.1% if the cadastral value was revised in the last 10 years, or 2% if it has not been revised recently. (Most Costa del Sol municipalities use 1.1%.)
3. Apply the non-resident tax rate: 24% for non-EU/EEA residents (which now includes UK citizens post-Brexit).

The result is your annual IRNR bill for imputed income. It is filed and paid via Modelo 210, due by 31 December of the following year (e.g. the 2025 tax year is due by 31 December 2026).

Important note for UK owners: Before Brexit, UK residents paid the EU rate of 19%. Since 1 January 2021, UK citizens are treated as non-EU and pay 24%. This is a significant difference and has been confirmed in successive Spanish budgets through 2025–2026.

Let’s take a typical two-bedroom apartment in Estepona purchased for €350,000.

So the annual imputed income tax on a €350,000 property that sits empty is approximately €416 per year. This is in addition to your IBI (council tax), community fees, and insurance.

Had the UK remained in the EU, the same calculation at 19% would produce €329.18 — a difference of roughly €87 per year. Not catastrophic, but it adds up over the years.

If you rent your Spanish property to tenants (whether as a holiday let or a long-term rental), you must declare the actual rental income and pay IRNR on it.

Tax rate: 24% for UK (non-EU) residents. EU/EEA residents pay 19% and can deduct allowable expenses — but post-Brexit UK owners cannot deduct expenses against Spanish rental income. You pay 24% on the gross rental income, with no deduction for mortgage interest, maintenance, management fees, or any other cost.

This is one of the most punitive consequences of Brexit for UK property owners in Spain. For example:

• You earn €12,000 in annual rental income
• You incur €4,000 in expenses (management, cleaning, maintenance, insurance)
• An EU resident would pay 19% on (€12,000 − €4,000) = 19% × €8,000 = €1,520
• A UK resident pays 24% on €12,000 = €2,880

That is nearly double the tax bill. There are ongoing legal challenges arguing that this differential treatment violates the UK–Spain double taxation treaty, but as of early 2026 the Spanish tax authority maintains the current position. See our dedicated guide on rental income tax for non-residents.

For periods when the property is not rented, you still owe imputed income tax (as above) on a pro-rata basis for those unoccupied months.

Using the same €350,000 apartment in Estepona, now rented as a holiday let for 20 weeks per year:

This total of roughly €3,616 covers both the rental income tax and the imputed income tax for the unoccupied period. You would also owe IBI, community fees, and running costs on top of this.

In the UK, you must also declare this rental income as part of your worldwide income. You can then claim double taxation relief under the UK–Spain treaty to avoid paying tax twice on the same income. In practice, HMRC gives you a credit for the Spanish tax paid, so you only pay the difference if your UK marginal rate is higher than the Spanish rate.

Modelo 210 is the tax return used by non-residents to declare Spanish income. You may need to file it multiple times per year, depending on your situation:

• Imputed income (no rental): one Modelo 210 per year, due by 31 December of the year following the tax year
• Rental income: one Modelo 210 per quarter in which rental income is received (due within 20 days of the end of each quarter: April, July, October, January)

Most UK owners appoint a fiscal representative (representante fiscal) or a gestoría (tax agency) to handle Modelo 210 filings on their behalf. Typical cost: €100–€200 per year. This is money well spent — late filing attracts automatic surcharges of 5–20% plus interest, and the Agencia Tributaria has increasingly efficient systems for identifying non-compliant non-residents.

Your fiscal representative will need your digital certificate or authorisation, your IBI bill (for the valor catastral), and details of any rental income received. Most handle everything electronically and will confirm each filing by email.

Tip: keep your IBI receipts and rental records organised from day one. If you are using a property management company, ask them to provide a quarterly income summary in the format your fiscal representative needs.

Wealth Tax (Impuesto sobre el Patrimonio) applies to non-residents whose Spanish assets exceed €700,000 in net value (after deducting any outstanding mortgage). The rates are progressive, starting at 0.2% and rising to 3.5% for assets above €10.7 million. Andalucía, which includes the Costa del Sol, applies the national rates without regional modifications.

For most UK buyers purchasing a single property under €700,000, wealth tax does not apply. But if you own multiple Spanish properties or a single high-value villa, check the thresholds carefully. Spain also introduced the Impuesto Temporal de Solidaridad de las Grandes Fortunas (solidarity tax) for net assets above €3 million — unlikely to affect most readers, but worth noting.

Capital Gains Tax on Sale

When you sell a Spanish property, you pay capital gains tax at 19% on the profit (sale price minus purchase price, adjusted for acquisition costs and documented improvements). The buyer is required to withhold 3% of the sale price and pay it directly to the Agencia Tributaria as an advance payment against your potential tax liability. If the 3% retention exceeds your actual tax due, you can reclaim the difference via a Modelo 210 refund application.

You will also need to declare the gain in the UK and claim double taxation relief to avoid paying CGT twice. UK CGT rates on overseas property disposals for 2025–2026 are 18% (basic rate) or 24% (higher rate), and you receive a credit for the 19% already paid in Spain.

The UK–Spain Double Taxation Convention prevents you from being taxed twice on the same income. The key principles for property owners are:

• Rental income: taxed first in Spain (where the property is located), then declared in the UK with a credit for Spanish tax paid
• Capital gains: taxed in both countries, but the UK gives credit for Spanish CGT paid
• Imputed income: this is a uniquely Spanish concept and is not recognised by HMRC, so there is no double tax issue — you simply pay it in Spain

The treaty does not override Spain’s right to charge non-EU rates or deny expense deductions to UK residents. It only ensures the same income is not taxed in full by both countries. If your UK tax liability on the same income is lower than the Spanish tax already paid, you do not get a refund of the difference — you simply pay nothing further in the UK on that income.

For a complete overview of your ongoing property costs, use our purchase cost calculator and add the annual tax estimates from this guide to build a realistic annual budget.