Common Mistakes When Filing the Modelo 210 and How to Avoid Them

Filing the Modelo 210 tax form is a crucial tax obligation for non-resident property owners in Spain. However, several common mistakes can complicate the process and result in penalties. As the first tax filing software for non-residents in Spain, IberianTax is here to guide you through these errors and how to avoid them.

Determining the Cadastral Value

One of the most frequent mistakes is confusing the cadastral value with other property values such as the acquisition value or the reference value. In Spain, each value serves a different purpose:

• Acquisition value: The price at which the property was purchased plus the acquisition costs.
• Cadastral value (Valor Catastral): The value can be found on the IBI (property tax) receipt. It is an administrative value given by the Dirección General de Catastro, which depends on the Ministry of Finance. The cadastral value is typically lower than the reference value and acquisition value.
• Reference value (Valor de Referencia): An administrative value determined by the Directorate General of Cadastre, used for the Property Transfer Tax and the Inheritance and Gift Tax.

To avoid this confusion, ensure you use the correct cadastral value when completing the Modelo 210. This value can be found on the IBI receipt. Verify that the value you are using is the correct one and not confused with other property values.

Using the Incorrect Imputation Rate

Another common error is using the wrong imputation rate to calculate the deemed income. Many taxpayers mistakenly apply 1.1% instead of 2%. The correct rates are:

1.1%: For properties whose cadastral value has been revised and updated in the last ten years as a result of a general collective valuation procedure. Individual revisions of the cadastral values do not impact the applicable imputed percentage.

2%: For properties whose cadastral value has not been revised in the last ten years through a general collective valuation procedure.

The tax office publishes the list of municipalities that can apply for the reduced 1.1% imputed percentage. To ensure accuracy, check the revision date of your property’s cadastral value on the IBI receipt or the list of municipalities that can apply the 1.1%. If the value has been revised as part of a general collective valuation procedure in the last ten years, use 1.1%. If not, apply 2%.

IberianTax´s filing software is 100% accurate and updated using the correct percentage.

Declaring the Property as 100% Owned by One Owner

Declaring the property as 100% owned by one owner when it actually belongs to two or more people is another frequent mistake. Unlike the IBI, the Modelo 210 requires that each owner file their own declaration according to their ownership percentage, rather than submitting a single declaration per property.

To prevent inconsistencies and potential penalties, ensure that each owner files their own Modelo 210 according to their ownership percentage. 

Declaring the Garage and Storage Room Together with the Property

Another common error is declaring the parking space and storage room along with the main property. When the garage and storage room have different cadastral references and values, they must be declared separately.

To avoid this mistake, check if the garage and storage room have separate cadastral references. If they do, submit separate declarations for each.

Not Taking Advantage of All Deductible Expenses

When it comes to rental income, not utilizing all deductible expenses allowed by law, such as property depreciation, is a common error. This oversight can lead to paying higher taxes than necessary.

To ensure you are not overpaying, make sure you are informed about all allowable deductible expenses and include them in your declaration. Examples of deductible expenses include:

• Property depreciation
• Homeowner’s association costs
• Local taxes
• Property management fees

Including these expenses in your declaration can significantly reduce your taxable base.

Failing to File the Declaration

Surprisingly, a common mistake is not filing the declaration at all. Many taxpayers think they only need to pay the IBI or SUMA with the local administration and forget about the state Non-Resident Income Tax declaration that must be filed with the Spanish Tax Agency.

To avoid missing this critical obligation, remember that in addition to paying local taxes like the IBI or SUMA, you must file the Modelo 210 with the Spanish Tax Agency even if the property is for personal use or empty. Keep track of your tax obligations and set reminders to ensure you meet all necessary filings.

Missing Deadlines

Missing deadlines is another frequent issue. Depending on the type of income, different deadlines apply:

• Imputed income: Must be reported any time during the following year, but no later than December 31st.
• Rental income (from 2024 onwards): Must be reported in the following year but within the first 20 days of January.
• Capital gains: Must be reported within 4 months from the sale date.

To stay compliant, mark your calendar with these deadlines and ensure you file within the specified timeframes.

Additional Tips to Avoid Errors

Keep Your Documentation Organized

Ensure you have all necessary documents, such as the IBI receipt, handy when completing the Modelo 210. Proper organization of your paperwork can help streamline the filing process and prevent errors.

Double-Check Your Information

Review all details twice before submitting the form. This includes names, tax identification numbers, and numerical values. Double-checking can catch minor errors that might lead to complications later.

Use IberianTax for Hassle-Free Filing

Instead of navigating these complexities on your own, consider using IberianTax. Our platform simplifies the process of filing the Modelo 210 by guiding you step-by-step and ensuring all details are correctly entered. With IberianTax, you can avoid common mistakes and ensure compliance with Spanish tax regulations effortlessly.

Stay Updated with Tax Regulations

Tax laws and regulations can change. Stay informed about any updates that might affect your obligations as a non-resident property owner. IberianTax provides regular updates and resources to keep you informed about relevant changes in tax law.

At IberianTax, we specialize in helping non-resident property owners in Spain navigate their tax obligations. Our software is designed to make the tax filing process straightforward and error-free. By using IberianTax, you can ensure your Modelo 210 is filed correctly and on time, avoiding costly mistakes and penalties.
Avoiding these common mistakes when filing the Modelo 210 can save you time, money, and legal complications. Stay informed and always double-check the details before submitting your declaration. For a seamless and accurate tax filing experience, trust IberianTax to handle your Modelo 210 needs.