Tax
Spanish property and tax: what owners need to know
Owning a Spanish property brings Spanish tax obligations separate from the UK. UK owners must file an annual Modelo 210 return whether or not the property is let, and there is IBI, possibly wealth tax, and capital gains tax on sale. Here is what to file and how it meets UK tax.
By David ElliottBSc FCA, Founder & Managing PartnerFigures in this piece were checked on 11 September 2026. Rates and thresholds change, so confirm anything you are relying on.
Owning a Spanish property brings its own set of Spanish tax obligations, separate from anything owed in the UK. Since Brexit, UK owners are treated as non-EU and non-EEA residents for Spanish tax purposes, which affects the rates that apply. Whether or not the property is let, there are annual filings to keep on top of. eba can introduce you to a firm of Spanish tax lawyers we work with, if you are looking for a trusted local firm to make the annual filings for you. Just ask us.
Non-residents’ income tax (Modelo 210)
All non-resident owners of Spanish property must file an annual return with the Spanish tax authorities using Form 210, the Non-Residents’ Income Tax return. What is owed depends on whether the property is let.
If the property is not let
Spain treats owning a second home as generating “imputed income” (renta imputada), even where no rent is received. The taxable amount is 1.1% of the property’s cadastral value, or 2% if that value has not been revised in the last ten years, taxed at 24% for UK owners. The lower 19% rate applies only to EU and EEA residents.
As an example, a property with a cadastral value of €150,000 produces imputed income of around €1,650 (1.1%), and a tax bill of roughly €396. This is payable even for a property used solely by the family, so it is easily overlooked. The return must be filed by 31 December of the following year.
If the property is let
Rental income is taxed at 24% for UK owners. Historically, UK owners have been taxed on gross rental income, with no deduction for mortgage interest, agent fees, insurance, IBI (Impuesto sobre Bienes Inmuebles, effectively council tax) or repairs. That is a harsher position than EU and EEA owners, who are taxed at 19% on net income after expenses.
A July 2025 National Court ruling found this difference in treatment breaches EU free-movement-of-capital rules, and allowed a UK owner to deduct expenses. This is not yet Supreme Court precedent, and the tax authorities continue to reject deduction claims at first instance, so any claim should be treated as provisional. Where expenses have been significant, it may still be worth protectively filing amended returns for the last four years while the point is tested further.
Since 2024, a full year’s rental income can be reported on a single Form 210 rather than quarterly, filed between 1 and 20 January of the following year.
Other Spanish taxes to budget for
IBI (Impuesto sobre Bienes Inmuebles) is the Spanish equivalent of council tax, billed annually by the local town hall and payable whether or not the property is let.
Wealth tax (Impuesto sobre el Patrimonio, Modelo 714) applies to Spanish assets exceeding €700,000 per owner, so jointly owned property benefits from an allowance for each owner. Rates and reliefs vary by the autonomous community where the property is located: some regions, including Madrid, offer a full exemption, while others apply the standard progressive scale. Above roughly €3 million of net Spanish assets, a separate Solidarity Tax on large fortunes can also apply.
Capital gains tax on sale
On an eventual sale, gains are taxed at 19%, calculated on the sale price less the original purchase price and allowable costs, including acquisition costs, sale costs, and qualifying capital improvements. The buyer must withhold 3% of the sale price and pay this to the tax authorities on account of the seller’s liability. If the 3% withheld exceeds the tax actually due, the excess can be reclaimed by filing Form 210 within three months of the sale.
The UK side
Spanish tax paid does not end the UK reporting obligation. As a UK resident, Spanish rental income and any gain on sale must be declared on your self-assessment return, using the foreign pages (form SA106), even where no further UK tax is ultimately due. Under the UK-Spain double taxation treaty, credit is normally given for Spanish tax paid on the same income or gain, so you are not taxed twice, though the calculation needs care where UK and Spanish rules on allowable expenses differ. Spanish wealth tax, by contrast, generally cannot be credited against UK income tax, since the UK has no equivalent tax.
What this means for you
The rules differ depending on whether a property is let, and UK ownership currently attracts less favourable treatment than EU and EEA ownership on rental income, though that may be shifting. If you own a Spanish property, or are considering buying one, we would be glad to talk through your position, including whether the recent court ruling is worth pursuing for expense deductions. It is also worth keeping good records of purchase costs, improvements and letting expenses as you go, since these matter for both the annual return and, eventually, the capital gains calculation on sale.
This is general information rather than personal tax advice, and Spanish tax in particular is best confirmed with a local specialist. Please get in touch with your usual eba contact, or start a conversation, and we can point you in the right direction.
Frequently asked questions
Do I have to pay Spanish tax if I do not rent out my property?
Yes. Spain charges non-resident owners an annual “imputed income” tax on a second home even when no rent is received, filed on Form 210 (Modelo 210). For UK owners it is based on 1.1% of the cadastral value (2% if that value has not been revised in the last ten years), taxed at 24%.
What is Modelo 210?
Modelo 210 is Spain’s Non-Residents’ Income Tax return. Every non-resident owner of a Spanish property files one each year, whether the property is let or used only by the family.
How is Spanish rental income taxed for UK owners?
At 24%, and historically on the gross rent with no deduction for expenses, which is harsher than the 19% on net income that EU and EEA owners get. A July 2025 National Court ruling has allowed a UK owner to deduct expenses, but it is not yet settled law, so treat any such claim as provisional.
Will I be taxed twice, in Spain and the UK?
Not normally. You still declare Spanish rental income and gains on your UK self-assessment return using the foreign pages (SA106), but the UK-Spain double taxation treaty usually gives credit for the Spanish tax paid, so the same income or gain is not taxed twice. Spanish wealth tax is the exception, as it generally cannot be credited against UK tax.
What tax do I pay when I sell a Spanish property?
Capital gains are taxed at 19% on the sale price less the purchase price and allowable costs. The buyer withholds 3% of the sale price and pays it to the Spanish authorities on account of your bill, and if that 3% is more than the tax actually due, you reclaim the excess on Form 210 within three months of the sale.