Non-Resident Tax for Owning Property in Mallorca
As a non-resident of Spain, if you own property in Mallorca, you are subject to non-resident tax (Impuesto sobre la Renta de No Residentes, or IRNR). This tax is levied on the rental income and capital gains derived from your property in Mallorca.
Rental Income Tax
If you rent out your property in Mallorca, you are required to pay tax on the rental income you receive. The tax rate for rental income is 24.75% for the first €1,000 of income, and then increases progressively up to 47% for income above €60,000.
Capital Gains Tax
If you sell your property in Mallorca, you are required to pay capital gains tax on the sale. The tax rate for capital gains is 19% for non-residents.
Filing and Payment Requirements
As a non-resident owner of property in Mallorca, you are required to file a tax return (Declaración de la Renta) every year, even if you do not have any rental income or capital gains to report. The tax return is due by June 30th of the year following the tax year (e.g., the tax return for 2021 is due by June 30, 2022).
Payments of non-resident tax for rental income and capital gains are due on a quarterly basis, with the first payment due by April 30th of the year following the tax year and the remaining payments due on July 30th, October 30th, and January 30th of the following year.
- If you are a resident of an EU or EEA country or of a country with which Spain has a tax treaty, you may be eligible for reduced tax rates or exemptions from non-resident tax.
- If you rent out your property in Mallorca for less than three months per year, you may be eligible for the "imputed income" regime, which allows you to pay a flat tax rate of 24.75% on the imputed rental income rather than the progressive tax rate.
- If you sell your property in Mallorca and reinvest the proceeds in another property within two years, you may be eligible for a tax exemption on the capital gains.