Renting out your Mallorca property as a non-resident: the tax rules nobody explains

If you own a property in Mallorca but live abroad, the Spanish tax system treats you differently from a resident landlord — and almost nobody explains how until you have already got it wrong.

This is the short, honest version. It is not tax advice for your specific case (for that, talk to an adviser), but it will stop you making the three mistakes we see every month.

You file Modelo 210, not the Spanish income tax return

Residents declare rental income in the annual Renta. As a non-resident, you file Modelo 210 — the Non-Resident Income Tax return (IRNR). It is a different form, on a different schedule, and nobody sends you a reminder.

Two things decide how much you pay:

Where you are tax resident.

• EU, Iceland and Norway: you pay 19% on your net rental profit — meaning you can deduct expenses.
• Everyone else (UK post-Brexit, US, Switzerland…): you pay 24% on your gross rent, with no deductions at all.

That second line is the one that surprises people. A British or American owner pays 24% of every euro of rent received, before a single expense. The same property owned by a German pays 19% of what is left after costs. It is not unusual for the effective difference to be double.

What EU owners can deduct (and non-EU owners cannot)

If you are in the 19% group, the deductible list is generous and worth using properly:

• Mortgage interest (the interest, not the capital repayment)
• IBI (council tax) and rubbish collection
• Community fees
• Home insurance
• Repairs and maintenance — note: maintenance, not improvements
• Utilities you pay for
• Property management fees
• Depreciation of the building at 3% a year on the higher of the purchase cost or the cadastral value, excluding land

Expenses are deducted in proportion to the days the property was actually rented. If it was let for six months, you deduct half the annual IBI, not all of it.

The deadlines that catch owners out

Modelo 210 for rental income is filed quarterly, in the 20 days following each quarter:

• Q1 → by 20 April
• Q2 → by 20 July
• Q3 → by 20 October
• Q4 → by 20 January

And the one people forget entirely: if your property sits empty, Spain still charges you an imputed income — a notional rent, taxed at the same 19% or 24%, calculated as 1.1% or 2% of the cadastral value depending on when it was last revised. That return is annual, due by 31 December of the following year.

Yes: an empty flat in Mallorca costs you tax even with zero income. It is one of the reasons leaving a property closed “until we decide what to do” is the most expensive decision an owner can make.

The three mistakes we see most

1. Assuming no income means no obligation. Empty property still generates imputed income. Two or three years of unfiled returns plus surcharges is a bad way to discover this.

2. Filing 24% when you could file 19%. Owners who moved tax residence within the EU, or who never checked which bracket applied, routinely overpay for years.

3. Deducting the whole year’s expenses on a half-year let. The proportional rule is strictly applied, and it is a common trigger for a review.

Where this leaves you

Renting from abroad is entirely doable — thousands of owners do it. What makes it painful is the combination of a form nobody warned you about, quarterly deadlines across time zones, and expenses you may not be entitled to deduct.

If your property is in Mallorca and you are not, two things are worth having: an adviser who handles Modelo 210 as routine, and a manager on the island who deals with the tenants, the incidents and the paperwork so that your only involvement is receiving the money.

We do the second part — and we work 100% on success: if your property earns nothing, we charge nothing. If you would like us to look at your case, message us on WhatsApp or write to info@habitampalma.es.