Modelo 210 Non-Letting Tax Explained
The Modelo 210 Non-Letting tax which is applied to non-resident owners of property in Spain is probably one of the least well understood levies made on second homeowners by the Spanish tax authorities.
After all, why should you be expected to pay tax on your personal holiday home in Spain when you do not rent it out at all and make no money from it?
The Modelo 210 Tax Form was created by the Spanish Tax authorities to enable non-residents to file and pay tax on income generated in Spain arising from their ownership of a property there. And covers three main areas – income generated by letting the property, income generated by selling the property (capital gains tax) and a deemed or imputed income tax on the benefit of owning the property – even when it isn’t rented out at all.
As a non-resident of Spain, your property there is automatically deemed to be a form of income – regardless of whether you rent it out or not. The rationale being that even though it isn’t rented out currently you could always decide to rent out the asset in the future.
So it is important to appreciate that this Non-Letting Tax is not really in fact a property tax at all – but more a form of income tax, based on the benefit of owning a second home.
How Is The Modelo 210 Non-Letting Tax Calculated?
Your annual Modelo 210 Tax liability is based on your property’s rateable value (the catastral value) – not the purchase price.
This rateable value is set by the local council that governs the region of Spain where your property is located and can be easily found on your Spanish council tax bill, also commonly referred to as the IBI.