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Non-resident owners of second homes here on Ibiza not only have to pay property tax (IBI) in Spain, but are also subject to a limited income tax based on the value of the property. This may sound paradoxical for a homeowner who has no income here, but the tax law argues that having the use of this property for the whole year is a form of income. As a result, nonresidents have to file the “modelo 210” tax form by December 31st of each year. There is a separate form for each individual type of tax, which is provided with a number so that entering the number already gives a first indication of which tax is to be paid, whereby there are three types of modelo 210 that run under this number.
The basis for the tax calculation of the modelo 210 is the cadastral value of the property as determined by the municipality. If this was last determined more than 10 years ago, then the taxable income is 2% of the cadastral value. It the cadastral value has been adjusted recently – as
it has in the municipalities of Sta. Eulalia and Ibiza then the tax is based on only 1.1% of the cadastral value. Nonresident owners residing in the EU have to pay a 19% tax on that income amount, while owners based outside the EU, including Switzerland and the UK, must pay 24%.
The tax is due by December 31st of the following year, and can be paid by self assessment (“autoliquidación”) using the 210 tax model. This means that the taxpayer has to fill out his tax return himself (or through a tax consultant) on a corresponding form and pay the tax he has calculated to the tax office. The tax office does not issue a tax assessment of its own accord, but has four years to check the correctness of this tax payment. The tax return can be submitted online with an electronic signature accepted by the tax authority. As a rule, however, the modelo 210 is presented in paper form to a bank involved in collection procedures (e.g. CaixaBank, Banco Sabadell) in order to settle the tax liability.
If the modelo 210 is not submitted on time, fines will be incurred based on the amount of unpaid taxes, provided that the tax office has revealed the non-payment. The tax becomes barred by statute 4 years after the deadline for submission, and can no longer be collected. This means that the tax office can only retroactively assess this tax going back 4 years. So in 2023 they can go back to the year 2018, since the submission deadline for that year was December 31st 2019.
The modelo 210 should not be confused with the form of the same name for rental income. The tax on rental income must be paid quarterly by April 20th, July 20th, October 20th and January 30th us ing the modelo 210. The third type of modelo 210 relates to the sale of real estate and is a profit tax return. The profit is calculated based on the modelo 211 (the buyer pays 3% of the purchase price directly to the tax authorities) as the difference between the acquisition cost and the selling price.
If the purchase price of the property including additional costs exceeds the amount of 700,000 euros, non-residents in Spain also have to pay wealth tax (modelo 714). This form 714 is to be used equally by residents and non-residents, where- by non-residents only have to tax the assets located in Spain, while for residents the worldwide assets have to be assessed.
The deadline for submitting the wealth tax is June 30th of the following year, which means that nonresidents who are subject to the wealth tax must pay both the modelo 210 and the modelo 714 by June 30th, 2023 for the past tax year of 2022. All other non-residents have until December 31st 2023 to pay their taxes. As you can see, a basic understanding of the modelo 210 is of great importance for all non-residents with property in Spain, as failure to comply with the deadlines mentioned will result in penalties.