Tax & Accounting

Expert tax guidance for international residents and property owners in Spain. Ensure compliance, avoid penalties, and optimize your financial position with our English-speaking specialists.

Spanish tax is one of the areas where getting things wrong is most expensive. Whether you’re a resident or a non-resident, owning property or assets in Spain creates tax obligations, and the Spanish tax authority (Agencia Tributaria) is increasingly effective at identifying people who aren’t meeting them. At PALS, our English-speaking tax advisors help expats and international property owners in Murcia stay compliant, avoid penalties and pay only what they’re legally required to.

Tax in Spain for Expats: Resident vs Non-Resident

Your tax obligations in Spain depend primarily on whether you are a tax resident or a non-resident. The threshold is straightforward: if you spend more than 183 days per year in Spain, you are considered a tax resident and must declare your worldwide income here.

If you spend less than 183 days in Spain but own property or other assets here, you are a non resident for tax purposes, but you still have obligations.

Non residents are required to submit a Non Resident Tax Return each year, even if they do not rent out their property or earn any other income in Spain. If you are a non resident and rent out your property, you must also submit an additional tax return to declare the rental income earned, alongside your annual Non Resident Tax Return.

Getting this classification wrong, or ignoring it, is one of the most common and costly mistakes made by UK and Irish property owners in Spain. Our team can clarify your status and make sure you’re filing correctly.

If you are a UK resident with Spanish property or income, you need to declare that income on your UK Self Assessment return as well as meeting your Spanish obligations. The two systems interact, and understanding how they fit together is essential to avoid both overpaying and falling foul of either authority.

Non-Resident Tax in Spain: What You Need to File

If you own property in Spain but are not a tax resident, you have two main annual obligations:

Imputed income tax (Modelo 210 - annual)

Even if your property sits empty all year and generates no rental income, Spanish tax rules require non-residents to pay tax on a deemed amount calculated from the property´s cadastral value.

Rate: 19% (EU/EEA) | 24% (Other)

Deadline: 31 December

Rental income tax (Modelo 210 - quarterly)

If you rent your property out, including short term holiday rentals, you must file quarterly returns declaring the income received.

PALS prepares and submits both returns on your behalf, so you never miss a deadline.

Income tax in Spain for residents: the annual declaration

If you are a Spanish tax resident, you must file an annual income tax return (Declaración de la Renta, Modelo 100) by the end of June each year, covering the previous tax year. This covers all your worldwide income: employment, rental, pensions, savings and investments.

UK Pensioners & Retirees

Pension income is generally taxable in Spain once you become resident. State pensions and most private pensions fall under Spanish tax, though government service pensions may remain taxable in the UK.

Our team prepares Spanish resident tax returns in English, going through each income source with you to make sure nothing is missed and all available deductions are applied.

Modelo 720

Overseas Assets Declaration

Modelo 720 is a Spanish information return that requires tax residents to declare overseas assets, including UK bank accounts, investments, property and pension funds, if the total value in any category exceeds €50,000. It is not a tax return in itself, but failure to file it or filing it incorrectly carries some of the harshest penalties in the Spanish tax system.

If you have moved to Spain or are planning to, and you have significant assets in the UK, Modelo 720 is something you need to be aware of from the moment you become resident.

Capital gains tax in Spain

If you sell a property or other asset in Spain, the profit is subject to Spanish capital gains tax (ganancia patrimonial). The rates are progressive, starting at 19% for gains up to €6,000 and rising to 28% for gains above €300,000.

Non-Resident Withholding

The buyer is legally required to withhold 3% of the purchase price and pay it to the tax authority as a prepayment of your Capital Gains Tax. You then file a return to settle the final amount.

Resident Over 65?

You may be exempt from capital gains tax when selling your primary home, subject to specific conditions.

Frequently Asked Questions

Do I need to pay tax in Spain if I own a property there but don't live there?

Yes. Non-residents who own property in Spain must file an annual tax return and pay imputed income tax on the property, even if it sits empty. If you rent the property out, you must also file quarterly returns on the rental income.

What is the difference between a tax resident and a non-resident in Spain?

If you spend more than 183 days per year in Spain, you are a tax resident and must declare your worldwide income here. If you spend less than 183 days but own assets in Spain, you are a non-resident and must file returns covering your Spanish income and property only.

Do UK nationals still benefit from EU tax allowances in Spain after Brexit?

In most cases, no. UK nationals are now treated as non EU residents, which affects certain allowances and rates. However, the Spain UK double taxation treaty remains in force and provides important protections against being taxed twice on the same income.

What is Modelo 720 and who needs to file it?

Modelo 720 is a declaration of overseas assets that must be filed by Spanish tax residents who hold more than €50,000 in foreign bank accounts, investments or property. The penalties for not filing are severe. If you have moved to Spain and have significant UK assets, this applies to you.

What is the capital gains tax rate in Spain?

Capital gains tax in Spain is charged at progressive rates: 19% on the first €6,000 of gain, rising to 28% on gains above €300,000. Non-residents face a 3% withholding at the point of sale, which is then offset against the final tax liability.

Can PALS handle my Spanish tax returns in English?

Yes. We prepare and submit all Spanish tax returns, resident and non resident, working in English throughout. We go through each return with you before filing so you understand exactly what is being submitted and why.

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