This page presents the main taxes to which a non-resident owner in Spain is subject, excluding rental income and excluding capital gain on the occasion of a sale, which are the subject of dedicated pages.
The Franco-Spanish tax treaty: general principle for property
France and Spain concluded on 10 October 1995 a tax treaty intended to avoid double taxation in matters of income and wealth. Regarding property, the treaty establishes a clear principle: income and gains from property are taxable in the state where this property is located.
A French national owning property in Spain is therefore subject to Spanish taxation on income and gains generated by this property. France may nevertheless require a declaration of this income to calculate the tax rate applicable to the taxpayer's other income (effective rate method).
This coordination between the two tax systems requires precise coordination of declarations made in France and in Spain.
Non-resident income tax (IRNR): the unrented property
A non-resident owner who does not put their property for rent in Spain is not for that reason exempt from taxation. The Spanish tax administration considers that simple holding of property generates taxable notional income, called imputed income.
Calculation basis of imputed income
Imputed income is calculated on the basis of the cadastral value of the property:
- 1.1% of the cadastral value if it has been revised during the last ten years
- 2% of the cadastral value in other cases
This notional income is then subject to IRNR at the rate of:
- 19% for tax residents of a member state of the European Union (including France)
- 24% for tax residents outside the European Union
Declaration and deadline
The declaration is made by means of form 210, to be filed at the latest on 31 December of the year following that in respect of which the tax is due. Thus, the tax due in respect of year N must be declared and paid before 31 December of year N+1.
In practice, many non-resident owners are unaware of this obligation and accumulate several years of declarations not made. The Spanish tax administration has a limitation period of four years to claim sums due, increased by late payment interest and applicable penalties.
Spanish property tax (IBI)
The Impuesto sobre Bienes Inmuebles (IBI) is the Spanish equivalent of French property tax. It is due annually by every owner of property in Spain, resident or non-resident.
Its rate is set by each municipality within a range defined by law, generally between 0.4% and 1.1% of the cadastral value according to the nature of the property and the municipality concerned.
Non-payment of IBI may result in the implementation of a forced recovery procedure by the local authority, which may go as far as seizure of the property. It is therefore essential to ensure that this tax is properly collected each year, even in the absence of stay in the property.
Direct debit and payment monitoring
For a non-resident owner, direct debit of IBI on a bank account, even French directly, is the surest way to avoid omissions and penalties. The firm can also assist with opening a non-resident account and setting up this direct debit on the Spanish account.
Other mandatory taxes and charges
Community charges
If the property is located in a community of owners (comunidad de propietarios), charges are due regardless of occupation of the property. Their non-payment may constitute a debt attached to the property, enforceable in case of sale or transfer.
Declarative obligations in France for property held in Spain
A French tax resident owning property in Spain has declarative obligations in France, even if this property is not rented.
Declaration of property assets abroad
Since 2018, all property located abroad must be declared in France via annex 3916-bis to the income tax return. Omission of this declaration exposes to a fixed fine per undeclared property.
Property wealth tax (IFI)
Property held in Spain is included in the property wealth tax (IFI) base in France, where the taxpayer is French tax resident and the net value of their worldwide property assets exceeds the liability threshold. The Franco-Spanish treaty provides mechanisms to avoid double taxation on this wealth.
Imputed income and effective rate
Although Spanish imputed income is taxed in Spain, it must in principle be mentioned in the French declaration in order to calculate the effective rate applicable to the taxpayer's other income. This rule, often unknown, may have an impact on the amount of French tax.
Risks in case of non-compliance with obligations
Non-compliance with tax obligations linked to holding property in Spain exposes the non-resident owner to several cumulative risks:
- IRNR assessments on non-prescribed years, increased by late payment interest and penalties
- Fines for non-declaration of the property in France (form 3916-bis)
- Difficulties during a subsequent sale if tax debts are attached to the property
- Blocking of the 3% withholding during the sale, without possibility of restitution if past declarations have not been regularised
Prior compliance is possible and recommended before any operation on the property (sale, gift, transfer).
What the firm handles
The firm assists non-resident owners in managing their property tax obligations in Spain:
- Calculation and filing of form 210 (IRNR on imputed income) for current years and non-prescribed years
- Monitoring and direct debit of local taxes (property tax and refuse collection tax)
- Verification of community charges and debts attached to the property
- Coordination with French declarative obligations
- Regularisation of non-compliance situations before any sale or transf
