What is the IRNR (non-resident income tax)?

If you own real estate in Spain, you may have heard about the Spanish non-resident income tax, or IRNR. This tax is levied on non-residents who own property in Spain and earn income from it.

The IRNR (Impuesto de la Renta para No Residentes) is a national tax that is administered by the Spanish Tax Agency. It is applicable to non-residents who own real estate in Spain, regardless of whether they use the property as a primary residence or as a vacation home (and regardless if you earn actual income on it!! More on that below).

This tax is different from the regular income tax that Spanish residents are required to pay, and it is calculated based on the rental income earned from the property or the imputed income that the property is deemed to generate.

When is the Spanish non-resident income tax applicable?

The IRNR is applicable if you earn income from renting out your Spanish property, even if it is only rented out for a short period of time. If you do not rent out your property, you are still required to pay the tax based on the imputed income that the property is deemed to generate. This imputed income is calculated based on the value of the property, and it assumes that you are earning a certain amount of income from the property, regardless of whether you actually are.

Who is responsible for paying this tax?

As we mentioned earlier, non-residents who own property in Spain are required to pay the IRNR. However, if the property is jointly owned, each owner will be responsible for their share of the tax. Moreover, they need to file the tax report individually.

In the scenario when you are obtaining income from renting the property, the tax rate for rental income is 19% for EU residents and 24% for non-EU residents.

It is also worth noting that there are certain deductions and allowances that can be applied to reduce the amount of tax owed. Note that this deductions are only applicable for EU residents, so the 19% applies to the net amount after you have discounted the deductions.  For example, EU residents can deduct expenses related to the maintenance and repair of the property. It is also important to note that if you have a mortgage on your Spanish property, you can deduct the interest paid on the mortgage from the taxable income.

EDIT: Since 28th July 2028 non-EU can also deduct expenses!

Non-residents can choose to file the tax return themselves, or they can hire a tax advisor to assist them. Spainable is specialized in supporting you filing this tax, we will help you ensure that you are in compliance with Spanish tax laws and can take advantage of any available deductions and allowances.

You should also be aware of the deadlines for payment and any deductions that may be available to you. By staying informed about this tax, you can avoid any unexpected penalties or fines and ensure that you are fulfilling your tax obligations as a property owner in Spain.

Spainable TIP! One important thing to note is that if you are a non-resident who owns property in Spain but does not earn any income from it, you are still required to file the IRNR. This is because the tax is based on the imputed income of the property, which is calculated as a percentage of the property’s assessed value.