Living abroad while keeping the house back in Spain is the most common situation among Spanish pensioners abroad, and also the one that triggers the most letters from Hacienda, as Spaniards call their tax authority. Not because it is especially complicated, but because it brings together three obligations that do not talk to each other, fall due in different months and that almost nobody links with the word "pension".
Three taxes, three calendars
| What | Why it affects you | When |
|---|---|---|
| Spanish non-resident income tax (IRNR) on the property | The property is at your disposal, whether you use it or not | Modelo 210, in the calendar year after the income accrues |
| Spanish wealth tax | You are taxed on a territorial basis: only on what you own in Spain | During the following year's income tax campaign |
| Local taxes | IBI (the annual property tax), the rubbish charge and, in some municipalities, a dropped-kerb fee, plus the plusvalía municipal when you sell | Set by each town hall |
The pension is left out of this table on purpose. The treaty decides where the pension is taxed, and that runs on its own track, as we explain in public or private pension. The house is a separate matter and does not depend on where the pension is taxed.
Imputed income: you pay for owning it
A home kept at the disposal of its non-resident owner generates imputed income for the days on which it is not let. It is calculated on the valor catastral (the cadastral value the Spanish land registry assigns to every property), split by ownership percentage and by days, and declared on Modelo 210 with its own income type code. The mechanism, with a worked example and the detail of which percentage applies depending on whether the cadastral values have been revised, is set out in imputed income.
What I want to stress here is something else: this obligation gives no warning. No letter arrives in the first year, there is no direct debit, and the only sign is silence. The warning comes three or four years later, all at once and with the years piled up, because the Agencia Tributaria, the Spanish tax authority, cross-checks cadastral ownership against returns filed, and whoever is missing shows up automatically.
A parking space or a storage room with its own cadastral reference generates its own imputed income, even if you bought it together with the flat and it is in the same building. It is one of the omissions that causes the most requests from the tax authority, because the amount is small and the gap is obvious when the data is cross-checked.
The wealth tax, which does show up here
Someone who does not live in Spain pays the Spanish wealth tax on a territorial basis, as a non-resident subject to what Spanish law calls limited liability: only on assets and rights located in Spanish territory. The home is counted at its value for the purposes of the tax, which is not what you would be paid for it today: the law takes the highest of the cadastral value, the value checked by the tax authority for other taxes, and the purchase price. The asset-by-asset detail is in how assets are valued.
Two rules change the result a great deal and are worth checking before taking anything for granted:
- The national tax-free allowance of €700,000, below which many cases come to nothing. But non-resident taxpayers may apply the rules of the Spanish region where the greater part of the value of their Spanish assets is located, and those regional rules may set a different allowance and their own reliefs. Which comes out better is a calculation, not a hunch.
- Debts are only deductible if they are connected with Spain. Someone taxed on a territorial basis can deduct only the charges and encumbrances on the assets located here and the debts taken on to invest in them. The mortgage on the Spanish house counts; the loan you took out in your country for something else does not.
If the Spanish estate is large, you also need to look at the tax on the largest fortunes, which has its own guide in the solidarity tax, and at the joint cap between income tax and wealth tax, which works in a particular way for a non-resident: the joint cap.
If you also let it for part of the year
Then the year splits in two: rental income for the days it was let, and imputed income for the days it was at your disposal. They are two different types of income, with different codes, and they cannot be merged into a single return even though they refer to the same flat and the same year. The exact split is in days let and apportionment, and the deadlines and rates for letting are in Modelo 210 for rental income.
For a pensioner living in the European Union, Iceland, Norway or Liechtenstein the difference is substantial: expenses can be deducted and the lower rate applies. For someone living outside that circle (think of someone who retired to South America, or to the United Kingdom after Brexit) the taxable base is the gross income, with no expenses. The same flat, the same rent, and almost twice the tax.
When your children or another relative use the house
This is so common that it deserves a paragraph of its own: the pensioner living abroad lets a son, a brother or a mother live in the flat, without charging anything. Intuition says that if no rent is charged there is no income to declare. The rules say otherwise: letting a relative use the property free of charge does not make the obligation disappear, and the home keeps generating whichever rental or imputed income applies to the case.
It is also worth documenting who uses the property and on what terms, because in a tax audit the difference between free use by a relative, an informal undeclared tenancy and your own use is proved with papers, not with explanations. A contract, even at a price of zero, and utility bills in the name of the person living there are worth more than any statement made afterwards.
The full tax year of a pensioner with a home in Spain
| When | What is due |
|---|---|
| January or February | Request the certificate of tax residence for the year just closed |
| First quarter | Check whether there is a Spanish wealth tax obligation and gather valuations |
| During the year | File Modelo 210 for the previous year's imputed income and, if the property was let, the one for that income |
| All year round | Check that the withholding on the pension is still correct |
| Before selling | Work out the gain, the 3 % withholding and the effect of the date |
It is not a complicated calendar; it is a calendar that does not warn you. That is why, for clients in this line, we send the reminders ourselves instead of waiting for them to remember.
Why this combination causes so many requests
Because each piece leaves a different trail and all three are cross-checked without any human involvement. The Catastro, the Spanish land registry, says you own a property. The pension payer says you live abroad, or says you live here. The automatic exchange of information says where you hold accounts. When those three signals do not tell the same story, a file is opened. And the most common contradiction is a textbook one: a pension declared as a non-resident and no return for the home, or the reverse, a home declared as a resident while the payer withholds as for a non-resident.
Keeping a permanent home available in Spain does not make you a Spanish tax resident, but it is one of the tests treaties use to break the tie when both countries claim you as theirs. If on top of that you spend long spells here and keep your doctor, your car and your bank accounts in Spain, the argument stops being theoretical. How that tie is broken is explained in the dual residence conflict.
The day you sell
A sale of property by a non-resident has its own mechanics: the buyer withholds 3 % of the price and pays it over with Modelo 211, and the seller settles the gain on his or her own Modelo 210. The reinvestment exemption and the exemption for people over sixty-five do not work in the same way as for a resident, and there is a specific rule for residents of the European Union, Iceland, Norway and Liechtenstein that is worth looking at before signing, not afterwards. The complete route is in selling as a non-resident and on the I have sold a property page.
A warning we always give: the date of the escritura, the notarial deed of sale, decides the tax year, the rate that applies and, if you are thinking of coming back to Spain, also which country taxes the gain. Selling as a non-resident is not the same as selling in the year you are already resident here. Before agreeing a date with the buyer, it is worth running the numbers.
How we put it in order
When we open a file in this line we always take the same inventory: how many properties there are, how many owners, what percentage each one holds, which years have not been declared and which of them are still open. From that come the number of returns and the real cost, which is almost never what people imagine, because Modelo 210 does not group properties or owners together.
If there are years outstanding, they are regularised on your own initiative before any request arrives: the surcharge for late voluntary filing is noticeably cheaper than a penalty, and we explain that difference in surcharge, interest and penalty. We do not promise that the tax authority will not review anything; we promise that whatever is filed will be complete and defensible. Start with the pensioners form.