Second Home on Mallorca: What Non-Residents Pay in Tax

You own an apartment or a house on Mallorca but still live in your home country - that sounds like a comfortable setup. Tax-wise, it is more complicated than many owners think. A second home on Mallorca makes you liable for Spanish tax even if you never rent the property out. Non-residents must file their own annual tax return in Spain and pay a so-called Imputación de Rentas. Ignore it and you risk fines and back payments.

What Is the Imputación de Rentas Inmobiliarias?

Spain taxes property owners who use their home themselves or leave it empty on the basis of a notional rental income. That sounds odd, but it has been standard practice for decades. The state assumes you could theoretically earn income with the property and taxes a flat notional value.

The calculation base is the Valor Catastral, the tax value of the property recorded in the land registry (Catastro). Either 2% or 1.1% is applied to this value:

• 2% applies if the Valor Catastral has not been updated since 1994
• 1.1% applies to properties with an updated cadastral value

The result is the notional taxable base. The actual tax is then charged on that amount.

How High Is the IRNR for Non-Residents?

The rate depends on where you are tax resident. If you live in the EU, Iceland, or Norway, you pay 19% on the taxable base. If you are resident outside the EU/EEA - for example in the US or the UK - the rate is 24%. That sounds like a lot, but the absolute amount is often modest because the Valor Catastral is usually far below market value.

Example calculation: An apartment with a Valor Catastral of 120,000 EUR and an updated value, owned by an EU resident:

• Taxable base: 1.1% of 120,000 EUR = 1,320 EUR
• Tax (19%): 250.80 EUR per year

With an older cadastral value (2% rate) and, say, 80,000 EUR Valor Catastral:

• Taxable base: 2% of 80,000 EUR = 1,600 EUR
• Tax at 19%: 304 EUR per year (at 24%: 384 EUR)

You find the Valor Catastral on the IBI bill (Impuesto sobre Bienes Inmuebles) that your municipality sends you every year.

The Modelo 210: The Tax Return for Non-Residents

The IRNR is declared and paid via the Modelo 210. There are two options: file quarterly, or file once a year by December 31 of the year following the tax year.

Practical recommendation: Most non-residents with a single property file once a year. That keeps the paperwork to a minimum.

This is how the process works:

1. Take the Valor Catastral from your IBI bill
2. Calculate the taxable base (1.1% or 2%)
3. Calculate the tax (19% for EU/EEA residents, 24% for everyone else)
4. Submit the Modelo 210 via the Sede Electrónica of the Agencia Tributaria
5. Pay by bank transfer or through a Spanish account

The Modelo 210 can be completed online on the website of the Agencia Tributaria. Without a Spanish digital certificate (Certificado Digital) you will need a local tax advisor or gestor instead.

Double Taxation Treaties: How to Avoid Paying Twice

Spain has double taxation treaties with most countries, including Germany, the UK, and the US. For real estate the rule is consistent: the right to tax lies with the country where the property is located - in this case Spain.

In practice that means:

• You pay the IRNR in Spain
• Depending on your home country's rules, you may still have to declare the Spanish property income at home, but the treaty ensures it is either exempt or credited so you are not taxed twice
• In some countries the foreign income can raise the tax rate applied to your remaining domestic income (a progression effect), without the Spanish tax being charged again

How exactly you declare the property at home depends on your country's tax forms. If you file a tax return in your home country, ask a local advisor how Spanish property income is reported there.

What If You Rent the Property Out?

As soon as you rent the property to tourists or long-term tenants for even part of the year, the tax situation changes fundamentally. The Imputación de Rentas no longer applies for that period; instead you must declare the actual rental income.

EU and EEA residents may deduct actual expenses following a ruling by the European Court of Justice: proportional interest, depreciation, insurance, community fees. The rate stays at 19%. Non-EU residents pay 24% on gross rental income and cannot deduct expenses.

For the months in which the property is not rented, the Imputación still applies. So you file for the whole year and split it into rented and non-rented months.

Renting to tourists also requires an ETV license (Estancia Turística en Vivienda). Without this license, commercial short-term rental in the Balearics is illegal. More on the wider tax picture is in the guide to tax residency on Mallorca.

When Is a Gestor Worth It?

A local gestor (Spanish tax advisor) typically charges between 80 and 200 EUR for the annual IRNR return. Whether that is worth it depends on how complex your situation is:

• Simple cases (one property, not rented out): Many owners handle the Modelo 210 themselves. The calculation is manageable once you know your Valor Catastral.
• Mixed use (partly rented): A gestor is advisable here, because the pro rata calculation and deductible costs are more involved.
• Several properties or income from other Spanish sources: definitely get professional advice.

You can hire a gestor remotely by email from anywhere. Many firms on Mallorca speak English and specialize in foreign property owners. You will find more pointers on the lawyer and gestor page.

Conclusion

A second home on Mallorca is a wonderful thing, but it comes with Spanish tax obligations that many owners underestimate. The Imputación de Rentas Inmobiliarias is the most important one: an annual flat tax on the notional use value of your property, paid via the Modelo 210 by December 31 of the following year. The amounts are manageable for most owners - but if you ignore the deadlines, it gets expensive.

The double taxation treaty between Spain and your home country protects you from a genuine double burden. You pay tax on the property in Spain, declare it at home as required, and everything is handled correctly. If you are unsure, a one-off consultation with a gestor pays off - after that, many owners manage the annual return on their own.