Taxing rental income

How much tax do you pay on rental income from a holiday flat on Mallorca?

If you are tax-resident in an EU or EEA country, you pay 19% on your net income – i.e. on the rental income after deducting the allowable costs. If you are tax-resident outside the EU or EEA, for example in Switzerland, the United Kingdom or the USA, you pay 24% on the full gross rent, without being entitled to any deduction. For the days on which the property was in your possession but not let, a second, separate tax on notional income is added on top – with its own return and its own deadline, which you must not mix up with the rental tax.

You let your Mallorca property to holidaymakers and are not tax-resident in Spain? Then you are obliged to declare your rental income via the non-resident tax IRNR (Impuesto sobre la Renta de No Residentes – the Spanish income tax for people who are not tax-resident), using the form Modelo 210 (the standard tax return for non-residents). This applies regardless of whether you let via a portal such as Airbnb or Booking.com or privately, and it also applies to the days on which the flat stands empty. What differs is your country of residence: those who are tax-resident in the EU or EEA may deduct costs and pay the lower rate on the net result; those living outside pay the higher rate on the full gross rent. With the calculator below you enter your figures and immediately see what the tax year will cost you – including the often-overlooked second return for the days not let.

How it is calculated

The starting point is the gross income: everything the tenant pays you, excluding Spanish VAT and excluding the reductions that Spanish landlords know from the regular income tax – these are not available to non-residents, not even for residential lets.

From here the paths diverge. If you are tax-resident in the EU or EEA, you may deduct costs that are directly economically connected with the letting. If you are tax-resident in a third country, any deduction is completely ruled out, and the tax is calculated on the full gross income.

For EU/EEA landlords the calculator distinguishes two cost groups:

• Time-apportioned: Costs that arise all year round – such as the IBI (Impuesto sobre Bienes Inmuebles, the Spanish property tax, which goes to the town hall in addition to the IRNR), insurance, community charges, interest, maintenance and depreciation – are apportioned by the calculator only in proportion to the days actually let.
• Fully deductible: Costs that arise exclusively because of the letting – cleaning, laundry, portal commission, management – count in full.

Important: This breakdown is an interpretation of the wording of the law, not an officially prescribed formula. If in doubt, you must be able to prove that there is genuinely a direct economic link between the costs and the letting.

Interest and repair costs are additionally capped: together they must not exceed the property's gross rental income for that tax year. Anything beyond that cannot be claimed immediately, but can be claimed in the four following tax years.

The calculator works out the depreciation using a fixed rate (3%) on the higher of your paid purchase price or the valor catastral (cadastral value – the official land value shown on the IBI notice) – in each case excluding the land portion, since land itself does not wear out. If you don't know the exact valor de la construcción (the building's share of the cadastral value, i.e. the value excluding the land), the calculator apportions your purchase price in the same ratio as the land and building shares of the cadastral value. The purchase price also includes incidental purchase costs and value-enhancing investments, but not interest. What the calculator doesn't show: the separate depreciation for furniture let along with the property, to which you're additionally entitled – so your result tends to come out slightly too high in that respect.

At the end you get the rendimiento neto (net rental income – gross income less all deductible costs), to which the relevant rate is applied. In parallel, the calculator works out the imputación de rentas, also called renta imputada (the notional income the Spanish tax authorities assume simply for owning a property), for the days the property was not let, likewise based on the cadastral value. The calculator shows both results separately, as they represent two separate tax returns with different deadlines.

Special cases

Short-term letting via portals and the ETV licence

For tax purposes it makes no difference whether you let long-term or short-term via Airbnb, Booking.com or similar portals: the IRNR obligation, the form and the calculation remain the same. In addition, in the Balearics you need an ETV licence (Estancias Turísticas en Viviendas – the Balearic permit for holiday letting) for tourist letting; without it, hefty fines are possible, regardless of the tax situation. The Agencia Tributaria (the Spanish national tax authority) is also increasingly cross-checking data from letting portals against submitted tax returns. More on this: ETV licence Mallorca.

Brexit: UK owners pay like any other non-EU country

Since the United Kingdom left the EU, British nationals are treated as non-EU residents for tax purposes. Those who used to expect the lower rate and cost deductions have since had to pay the higher rate on gross rent – with no deductibility at all. This applies regardless of how long the property has been owned.

Hotel-like services: the leap to a permanent establishment

Cleaning and change of linen upon arrival and departure do not affect the simple IRNR obligation. However, if you offer your guests hotel-like services during their stay – interim cleaning, reception, catering, luggage service, even if you purchase them externally – or if you employ a full-time member of staff for the letting, this creates an establecimiento permanente (permanent establishment). In that case, a different assessment basis, a different rate and different reporting obligations apply; the calculator on this page is not designed for this case.

Co-ownership with different residency

If the property belongs to several people, each co-owner declares their share individually – including for tax purposes. If not all co-owners are resident in the same country, it may be that one co-owner is allowed to deduct costs while another is not, even though it concerns the same property.

Purchase or sale during the tax year

If you bought or sold the property during the year, only the period in which it actually belonged to you counts for the assessment – both for the rental income and for the proportional imputación for the days not let during your period of ownership.

VAT and Ecotasa

Pure holiday letting without hotel-like services is exempt from Spanish VAT. The Ecotasa (the Balearic tourist tax that guests pay per overnight stay) is not an income tax and does not form part of the IRNR assessment basis – you merely collect it from your guests and pass it on to the authorities, without it increasing or reducing your rental income.

Who this calculator is not intended for

The calculator is aimed at natural persons; if you let through a Spanish or foreign company, different cost rules apply. It also assumes private guests without tax withholding – if you let commercially to a company that properly withholds tax, your reporting obligation changes. And it shows only the Spanish tax, before your country of residence, where applicable, credits it against your tax there.

Deadlines and forms

For rental income, the agrupación anual (the annual summary of all rental income for a tax year in a single return, instead of four separate quarterly returns) now applies. Within this annual return, the exact deadline depends on your tax year and your result:

• For the tax years 2024 and 2025, the deadline ends within the first twenty calendar days of January of the following year.
• From the 2026 tax year onwards, the deadline shifts to the first twenty calendar days of April of the following year.
• If your return shows no tax payable because costs exceed income, it remains – even from 2026 onwards – within the first twenty calendar days of January. Anyone who waits until April in a loss-making year files too late.

The declaration for the deemed income of the days not rented follows its own calendar: up to tax year 2025 you had the entire following year to do this, from tax year 2026 onwards the window begins on 1 April and ends on 31 December of the following year. Both declarations are separate Modelo 210 forms with their own deadlines – you cannot combine them, and the calculator above shows both time windows separately.

Please note: The Agencia Tributaria does not send you an automatic reminder. The obligation to file lies entirely with you – for both declarations.

Legal basis and status

The calculation is based on the Spanish Non-Resident Income Tax Act (Real Decreto Legislativo 5/2004, Texto Refundido de la Ley del Impuesto sobre la Renta de No Residentes – TRLIRNR), in particular Art. 24 (tax base and deduction of costs) and Art. 25 (tax rates). For the deductible costs and depreciation, the Spanish Income Tax Act (Ley 35/2006, Art. 23) and its implementing regulation (Real Decreto 439/2007, Art. 14) apply additionally. The deadlines are set out in Orden EHA/3316/2010, Art. 5, in its respective current, consolidated version.

Official sources for further reading:

• Agencia Tributaria (AEAT) – online portal for Modelo 210: sede.agenciatributaria.gob.es
• Agencia Tributaria – information page on non-resident tax: agenciatributaria.es
• Real Decreto Legislativo 5/2004 – Texto refundido Ley IRNR (BOE): boe.es
• ATIB (Agència Tributària de les Illes Balears) – responsible for Balearic taxes (IBI, ITP, etc.): atib.es
• Consell de Mallorca – information on the ETV licence (holiday rentals): conselldemallorca.net

This page is updated whenever the law changes; the calculator itself automatically pulls the rates applicable to the respective tax year from a maintained register.

The Modelo 210: step by step

The Modelo 210 is the only official form for the IRNR. You can fill it in and submit it directly via the Agencia Tributaria's online portal – a Spanish digital certificate makes the process easier, but is not mandatory (you can also file through an authorised tax adviser).

What you need:

• NIE (Número de Identificación de Extranjero – the tax identification number for foreigners in Spain)
• Cadastral value of the property (shown on the IBI notice)
• Proof of rental income (bank statements, rental agreements)
• Receipts for deductible costs (EU/EEA only)
• IBAN for any potential tax refund

Process:

1. Add up rental income for the tax year
2. Calculate deductible costs on a pro-rata basis (EU/EEA only)
3. Determine the net or gross tax base
4. Apply the tax rate (19% or 24%)
5. Fill in Modelo 210 online (AEAT portal: sede.agenciatributaria.gob.es)
6. Submit the form and transfer the tax

Note: You won't receive any automatic reminder from the Agencia Tributaria. The obligation to file is entirely your responsibility.

Notional income for own use: taxable even without rent

A common misunderstanding: anyone who doesn't rent out their Mallorca property still has to submit an IRNR return – on a notional income (the imputación de rentas or renta imputada), calculated on the basis of the cadastral value.

The logic behind this: Spain taxes the economic benefit of owning a second home, even if you don't generate any income from it.

Since this guide focuses on rental income: anyone who both rents out and uses the property themselves within the same year must declare both situations separately – actual rental income for the letting days, and the Renta Imputada for the remaining days. The calculator above works out both amounts in one go.

Most common mistakes and how to avoid them

1. Forgetting to file

The Agencia Tributaria doesn't send a reminder. And the deadline is more complicated than many think: depending on the tax year and the result, it falls either in January or as late as April of the following year (details in the "Deadlines and forms" section above). Anyone relying on a blanket date risks automatic surcharges.

2. Trying to deduct costs as a non-EU resident

Swiss, British and other non-EU residents may not claim any costs whatsoever. Incorrect deductions lead to back payments and fines.

3. Not declaring short-term rentals

Airbnb and Booking.com pass on data to the Spanish tax authorities. Anyone who fails to declare is very likely to be discovered.

4. Not knowing the cadastral value

For the Renta Imputada you need the cadastral value. It's stated on the annual IBI notice. Without it, you cannot fill in the tax return correctly.

5. Confusing IBI and IRNR

IBI (paid to the local council) and IRNR (paid to the Agencia Tributaria) are two different taxes. Both must be paid.

6. Missing NIE

Without an NIE, no Modelo 210 can be filed.

7. Ignoring Brexit status

Many British owners still expect the more favourable EU rate and cost deductions. Since Brexit, the higher rate applies to them on the gross rent, with no deductibility whatsoever.

What comes next? Keeping an eye on further tax obligations

The Modelo 210 for rental income is often just one of several tax obligations:

If you're considering renting out through a Spanish company (SL) rather than as a private individual, you should first run the numbers from a tax perspective: Buying property via an SL. You'll find an overview of everything related to renting out property in Mallorca in the Renting Out Guide.

Checklist: Modelo 210 for landlords

Before submitting, you should tick off the following points:

• NIE is available and currently valid
• Rental income for the tax year fully documented (bank statements, contracts)
• Residency status checked (EU/EEA or non-EU/UK?)
• Deductible costs documented and calculated proportionally (EU/EEA only)
• Cadastral value taken from the current IBI assessment
• Rental days vs. personal-use days split out
• Tax rate determined using the calculator
• Deadline window for your tax year and result checked (January or April?)
• Modelo 210 submitted on time
• Tax paid by transfer or direct debit mandate issued
• ETV licence in place (for short-term tourist rentals)
• IBI paid separately