The IRNR (Non-Resident Income Tax) in Spain: How the Tax Regime for Foreign Property Owners Works (2026)

The IRNR (Impuesto sobre la Renta de No Residentes) is Spain’s tax on income earned in Spanish territory by people and entities who are not Spanish tax residents. For foreign property owners, it is the umbrella framework that governs how rental income, capital gains on property sales, imputed income on empty homes, and investment returns are taxed. The statutory text is the Real Decreto Legislativo 5/2004, which consolidates the original Ley 41/1998, and the procedural rules live in the Reglamento approved by Real Decreto 1776/2004. If you own property in Spain but live abroad, the IRNR is almost certainly your primary tax relationship with the Spanish exchequer.

What is the IRNR and who must pay it?

The IRNR is a direct tax that applies to all Spanish-source income obtained by non-resident individuals and entities. Under Article 1 of the consolidated Ley IRNR (RDLeg 5/2004), it taxes “the income obtained in Spanish territory by persons and entities not resident therein.” For a property owner, this means rental receipts, capital gains when you sell, imputed income on a vacant home, dividends from Spanish companies, and interest on Spanish bank accounts all fall within its scope.

The critical distinction is residency. If you spend more than 183 days in Spain in a calendar year, or if your spouse and minor children live there, or if your main economic activity is based in Spain, you are likely a tax resident and fall under IRPF instead. The IRNR only applies once you are confirmed as non-resident. Our guide to the 183-day tax residency rule covers the residency tests in detail.

What are the IRNR tax rates?

The IRNR applies flat rates, not the progressive bands used for residents. The rate depends on your country of tax residency, and a significant change took effect on 11 July 2021 that split the previously uniform rate.

Income type	EU/EEA residents	Non-EU residents
General income (rental, economic activity)	19%	24%
Capital gains (property sales, shares)	19%	19%
Dividends	19%	19%
Interest	19%	19%
Imputed property income	19%	24%
Pensions (progressive scale)	8-40%	8-40%

Before 11 July 2021, the general rate was 19% for all non-residents. The reform introduced the 24% rate for non-EU residents on general income, while keeping capital gains, dividends and interest at 19% across the board. This means a UK property owner renting out a Marbella apartment now pays 24% on rental income, while a German owner pays 19% on the same income, according to the AEAT’s published rate table.

The pension scale applies a progressive structure: 8% on the first EUR 12,000, 30% from EUR 12,000 to EUR 18,700, and 40% above EUR 18,700.

How does the IRNR treat rental income?

Rental income is taxed as general income under the IRNR. The key difference between EU and non-EU owners is not just the rate but the treatment of expenses. Under Article 24.6 of the Ley IRNR, residents of EU and EEA member states with effective information exchange can deduct expenses directly related to earning the rental income, following the same rules as Spanish IRPF. This includes property management fees, community charges, insurance, repairs, and mortgage interest on the property.

Non-EU residents cannot deduct these expenses. The taxable base is the gross rental income, with no deductions permitted. For a UK owner earning EUR 20,000 in annual rent, the tax is EUR 4,800 (24% of the gross). For a German owner with the same income and EUR 5,000 in deductible expenses, the tax is EUR 2,850 (19% of EUR 15,000). The difference is substantial.

Our dedicated guide to non-resident rental income tax and Modelo 210 walks through the filing process in detail.

How does the IRNR tax capital gains on property sales?

Capital gains from selling Spanish property are taxed at 19% for all non-residents, regardless of nationality. The buyer is legally required to withhold 3% of the purchase price and pay it to the tax authority as an advance on the seller’s tax liability. This is filed using Modelo 211.

The taxable gain is the difference between the purchase price (plus acquisition costs) and the sale price (minus selling costs). If the 3% retention exceeds the actual tax due, the seller can claim a refund via Modelo 210. If the retention is less than the tax owed, the seller must pay the difference.

For example, a property bought for EUR 300,000 and sold for EUR 500,000 generates a gain of approximately EUR 200,000. At 19%, the tax is EUR 38,000. The buyer withholds 3% of EUR 500,000, which is EUR 15,000. The seller must pay the remaining EUR 23,000 via Modelo 210. Our guide to non-resident CGT and the 3% retention covers this process step by step.

What is imputed income tax on empty property?

If you own property in Spain that is not rented out and not used for any economic activity, the tax authority imputes a notional income and taxes it under the IRNR. This is not a tax on actual income but a presumptive tax on the benefit of owning property.

The imputed income is calculated by applying a percentage to the valor catastral (the cadastral value shown on the IBI receipt). The general rate is 2%. A reduced rate of 1.1% applies to properties whose cadastral value was revised through a general collective valuation process that entered into force after 1 January 2012, or to properties that have no cadastral value at all (in which case 1.1% applies to 50% of the acquisition price or the administratively verified value, whichever is higher).

No expenses can be deducted from imputed income. The tax is filed annually via Modelo 210, typically in the first quarter of the following year. For a property with a valor catastral of EUR 200,000, the imputed income at 2% is EUR 4,000. A non-EU resident pays 24% on this, which is EUR 960 per year. An EU resident pays 19%, or EUR 760.

This is distinct from IBI (the annual municipal property tax) and from wealth tax. Our guide to annual property taxes for non-residents explains how these three taxes stack up.

Can EU or EEA residents elect to be taxed under IRPF?

Yes. Under Article 46 of the Ley IRNR, EU and EEA residents who are individuals can apply to be taxed under the IRPF rules rather than the flat IRNR rates. This is the optional regime, and it can lower the effective tax rate for property owners whose Spanish income is relatively modest.

To qualify, at least 75% of the taxpayer’s total income in the tax period must come from Spanish work or economic activity income. Alternatively, the taxpayer can qualify if their Spanish income is less than 90% of the personal and family minimum that would apply under IRPF, and their non-Spanish income is also below that threshold.

The election is made using Modelo 226. If approved, the tax authority calculates a type medio de gravamen (average effective rate) based on the IRPF scale and applies it to the Spanish-source income. If the resulting tax is lower than what was paid under the IRNR, the excess is refunded.

This regime is particularly relevant for EU retirees with Spanish pension income or EU owners whose rental income is modest relative to their overall earnings. It does not apply to non-EU residents.

What is a permanent establishment and why does it matter?

The IRNR distinguishes between income earned with and without a permanent establishment (establecimiento permanente). A permanent establishment exists when a non-resident maintains a fixed place of business in Spain, such as a branch, office, factory, or a construction project lasting more than six months.

Without a permanent establishment, income is taxed at the flat IRNR rates described above. With a permanent establishment, the income is taxed under the same rules as the Spanish corporate income tax (Impuesto sobre Sociedades), at the standard 25% rate (15% for newly incorporated companies in their first two profitable years). Most individual property owners will not have a permanent establishment, but those running a structured rental business with staff and premises might.

How do double taxation agreements interact with the IRNR?

Spain has signed double taxation agreements with a large number of countries, listed on the Agencia Tributaria’s treaty page. These treaties override the domestic IRNR rules where they provide a lower rate or a different allocation of taxing rights.

For property owners, the most relevant treaty provisions typically concern rental income (often taxed only in the owner’s country of residence, though Spain retains the right to tax) and capital gains (usually taxed only in the seller’s country of residence, except for property situated in Spain, where Spain retains taxing rights). If your country has a DTA with Spain, you may be able to reduce or eliminate Spanish tax on certain income types, though the 3% retention on property sales still applies regardless of treaty position.

You should always check the specific treaty between Spain and your country of residence, as the provisions vary. A fiscal representative can advise on treaty application.

IRNR comparison: three income types side by side

Feature	Rental income	Capital gains	Imputed income (empty property)
EU/EEA rate	19%	19%	19%
Non-EU rate	24%	19%	24%
Taxable base	Net (EU) or gross (non-EU)	Net gain	Valor catastral x 2% or 1.1%
Expense deductions	Yes (EU), No (non-EU)	Acquisition + selling costs	None
Filing model	Modelo 210	Modelo 211 (retention) + 210	Modelo 210
Filing frequency	Quarterly (210)	Per transaction	Annually
Withholding	Tenant retains	Buyer retains 3%	None

Do I need a fiscal representative?

Non-EU residents who own property in Spain are required to appoint a fiscal representative under Article 10 of the Ley IRNR. The penalty for failing to do so is a fixed fine of EUR 2,000, rising to EUR 6,000 if the resident is in a jurisdiction classified as a non-cooperative tax haven. EU and EEA residents with effective information exchange are exempt from this obligation, though many appoint one voluntarily for practical reasons.

A fiscal representative handles Modelo 210 filings, communicates with the tax authority, and ensures compliance with filing deadlines. Our guide to the fiscal representative role explains what they do and what they cost.

What about wealth tax?

The IRNR is an income tax. Wealth tax (Impuesto sobre el Patrimonio) is a separate levy on the value of your assets in Spain. In Andalusia, the regional wealth tax is suspended for assets below the state threshold, but the state-level wealth tax may still apply for high-net-worth owners. Our wealth tax guide for non-residents covers the thresholds and the Andalusian exemption in detail.

This guide is general information, not legal or tax advice. Rules change and individual circumstances differ. Verify current requirements with an independent lawyer (abogado) or tax advisor (gestor/asesor fiscal) before acting.