Tax on a second home you don't rent (renta imputada)

Key rules

• Standard rate: Deemed income on an unlet second home is 2% of the cadastral value.
• Reduced rate: The rate is 1.1% if the cadastral value was revised in the year or the ten previous years and came into force from 1994 onward.
• Rented homes: If you rent the property out, you are taxed on the real rent instead.
• Foreign property: With no Spanish cadastral value, a fallback basis built on foreign property value or purchase cost is used.

The short answer

A home you own, don't live in and don't rent out produces "deemed income" (renta imputada) every year. You pay income tax on it even though no money comes in. The amount is added to your general taxable income, and you declare it in your annual income tax return.

Which properties count

Deemed income applies to urban property that is all of these:

• not your main home,
• not rented out,
• not used in a business activity.

Typical cases are a holiday home or an empty flat. Land that is not built on also counts, unless it is being used.

Which properties do not count

• Your main home, and its garage up to two spaces.
• Property used in a business activity.
• Property you rent out. You are taxed on the actual rent instead.
• Property that cannot produce income, such as a home under construction, an uninhabitable one, or a protected cultural-interest building.

The questions below cover garages, plots and unfinished homes in more detail.

How much is added

The amount is a percentage of the property's cadastral value (valor catastral), the official value on the Spanish property register:

• 2% of the cadastral value as the standard rate.
• 1.1% if the cadastral value was revised in the year or the ten previous years and came into force from 1994 onward.

Which rate applies depends on whether your town revised its values. Check the revision date on your property tax bill (IBI) or ask your town hall.

Example: a second home with a cadastral value of 80,000 euros adds 1,600 euros of income at 2%, or 880 euros at 1.1%. You then pay tax on that amount at your normal rate.

Unlet property abroad

A foreign property has no Spanish cadastral value, so a fallback basis is used:

• Where the foreign country gives a cadastral-type value, or a value for its local property tax, the income is 1.1% of 50% of that value.
• Where no such value exists, it is 1.1% of the acquisition cost.
• Alternatively, it is 2% of the higher of the cost or the value used for the equivalent property tax in that country.

The wording of this fallback is complicated. Ask a tax adviser which basis fits your property before you file.

What to do

1. List every property you own, in Spain and abroad.
2. Remove your main home, rented properties and business properties.
3. For each one left, find the cadastral value and its revision date, or the foreign value or cost.
4. Apply the rate above and include the result in your return.

Frequently asked questions

Does my garage count as a second home for deemed income?

No, a garage of your main home is excluded, up to two parking spaces. Other property that you do not let and do not use for business can still generate deemed income.

Is land that I have not built on subject to deemed income?

Yes, land that is not built on is covered if you do not use it. Land that is being used is not covered.

Do I pay deemed income on a home that is uninhabitable or under construction?

No, properties whose use does not generate income are excluded. This covers homes under construction, uninhabitable homes and protected assets of cultural interest.

How is deemed income worked out on an unlet foreign property?

If the property has no Spanish cadastral value, it is 1.1% of 50% of the cadastral-equivalent value. Where no value is available, it is 1.1% of the acquisition cost, or 2% of the higher of the cost or the value used for the local property tax in that country.