IRNR for foreign owners in Menorca: what you pay even if you never rent out your home

Every foreign owner of a property in Menorca must pay the Non-Resident Income Tax (IRNR) every year, even if the property is never rented out and is used only privately. This is one of the tax aspects that most surprises international buyers, as many assume paying the local property tax (IBI) is enough. It isn't: they are two separate, independent taxes. This guide explains how it works, how much is paid and when it must be filed.

What is imputed income, and why is it paid even without rental?

The Spanish tax authority considers that having a home in Spain generates a theoretical economic benefit for its owner, even if it sits empty or is used only a few weeks a year, and therefore requires tax to be paid on this "imputed income". It is a notional income calculated on the property's cadastral value, not on actual earnings.

This tax applies to every non-resident owner whose property is not rented out or used for an economic activity. Since Fincas Venalis works exclusively in property sales, this is precisely the typical scenario for our clients: properties for private use, whether as a second home or an occasional holiday residence.

How is imputed income calculated?

Imputed income is calculated by applying either 1.1% or 2% to the property's cadastral value, depending on whether that value has been reviewed within the last ten years. The cadastral value always appears on the IBI (local property tax) bill.

• 1.1% of the cadastral value: if the municipality has reviewed cadastral values within the current tax period or the previous ten.
• 2% of the cadastral value: in all other cases, when the cadastral value is older.

The resulting tax base is then subject to the rate corresponding to the owner's country of tax residence. No expenses may be deducted from this imputed income.

What tax rate applies?

The applicable rate is 19% for tax residents of the European Union, Iceland, Norway and Liechtenstein, and 24% for all other countries — including the UK post-Brexit, the United States and Switzerland.

Example with a reviewed cadastral value of €300,000: imputed income would be €3,300 (1.1% of €300,000). An owner who is a tax resident of Germany would pay 19%, i.e. €627. An owner who is a tax resident of the United States would pay 24%, i.e. €792.

How and when is it filed?

Imputed income is declared using Form 210 with the Spanish tax authority, with a deadline of 31 December of the year following the one the tax relates to. For example, imputed income for 2026 is declared throughout 2027.

If the property was owned for only part of the year (for example, if purchased mid-year), the amount is prorated according to the number of days of ownership.

Filing Form 210 requires an NIE, as it serves as the tax identifier for non-resident taxpayers.

What happens if the property has several owners?

When the property belongs to more than one person, each co-owner must file their own Form 210 and pay tax only on their share of ownership. This is the typical case for married couples or partners buying together: if ownership is split 50/50, each declares half of the corresponding imputed income.

Can this tax be avoided?

There is no way to avoid imputed income while the property remains available to its non-resident owner; it only stops applying during periods when the property is actually rented out, which are then taxed under the rules for rental income.

As an agency specialising exclusively in property sales, we do not offer rental management, but it's important for our clients to know that imputed income is a recurring tax cost tied to simple ownership of the property, regardless of how it's used.

Frequently asked questions

Do I have to pay the IRNR even if I only use the property for two weeks a year?

Yes. Imputed income applies simply because the property is available to you, not based on actual use. It is only prorated by days of ownership, not days of actual use.

Does paying the IBI already cover this obligation?

No. The IBI is a local tax on property ownership. The IRNR is a separate, independent national tax, and both are mandatory.

What rate do I pay if I'm a tax resident of France or Germany?

19%, as an EU country. Tax residents outside the EU, the European Economic Area and Liechtenstein pay 24%.

Do I need a fiscal representative in Spain?

It is not generally mandatory for individuals without a permanent establishment, although having one makes managing notifications and deadlines easier, particularly for owners resident outside the EU.

What document do I need to file Form 210?

The NIE, which serves as the tax identifier, along with the property's cadastral value, found on the IBI bill.

Conclusion

The IRNR is an annual tax obligation that surprises many foreign owners in Menorca, precisely because it applies without any actual income being earned. Knowing about it in advance allows for accurate budgeting of the total cost of owning a property on the island.
At Fincas Venalis, we inform our clients about these obligations from the purchase process onwards, so they become owners with all the tax information they need.

More information: venalismenorca.com/en/