Depreciation in IRNR (Form 210): Calculation Basis, Land/Building Split, and Documentation

For tax non-residents earning rental income in Spain, depreciation (amortización) is one of the most critical deductible expenses—but it is also one of the areas most prone to errors and subsequent review or regularization issues in **Form 210** (Modelo 210).

Calculating depreciation is not merely about applying a generic percentage. It requires a detailed analysis of the calculation basis, the correct separation between land and building values, and a robust documentation trail that can withstand a formal review from the Spanish Tax Agency.

What Role Does Depreciation Play in IRNR / Form 210?

Depreciation allows you to offset the wear and tear of the building and the furniture provided with the rental. In the Form 210 filing, it acts by reducing the net taxable income, which can have a material impact on the final tax liability.

However, the deductibility of expenses (including depreciation) depends on the taxpayer’s country of tax residence and the IRNR rules applicable to the case, and should be reviewed case by case.

Why Depreciation Causes So Many Errors

The complexity lies not in the math, but in the validation of the source data. Many taxpayers and generalist firms use "standard" criteria that do not align with the actual legal or economic reality of the property, opening the door to future review or regularization issues.

Errors often stem from incorrect periodization, including non-depreciable concepts, or the inability to justify the original acquisition cost years after the purchase.

Calculation Basis: What Is Usually Reviewed

The basis for calculating depreciation is usually reviewed by reference to acquisition cost and cadastral values, depending on the applicable criteria in the case:

• The acquisition cost paid (including taxes and expenses inherent to the purchase).
• The cadastral value (valor catastral).

It is vital to review the title deeds (escrituras) and supporting purchase and tax records to determine this amount accurately. Using an estimate is insufficient; the Tax Agency will require original documents in case of a formal review.

Land/Building Split: Why It Matters

This is a key criterion frequently reviewed: land is not depreciable. Only the portion of the value corresponding to the construction can be depreciated.

To determine this proportion, you must refer to the IBI receipt (Impuesto sobre Bienes Inmuebles) or the cadastral record. Applying the depreciation percentage to the total purchase price without discounting the land value is a common error that may lead to regularization adjustments and, where applicable, surcharges or penalties.

Supporting Documentation: What Should Be Gathered

A well-prepared file is your best defense. We recommend always keeping:

• Public title deed of purchase or acquisition title (inheritance, gift, etc.).
• Receipts for ITP/AJD taxes, notary fees, registry, and property management expenses related to the purchase.
• The IBI receipt for the declared year to verify the land/building ratio.
• Invoices for improvements or investments made in the property that increase the depreciable base.

Common Depreciation Mistakes (Clear List)

• Failing to discount land value: Filing based on 100% of the property value.
• Periodization errors: Claiming the full quarter when the property was only rented for part of that time.
• Duplicating concepts: Including repair costs as depreciation or vice versa.
• Lack of traceability in co-ownership: Not splitting the depreciable base correctly according to actual ownership percentages.
• Using generic criteria: Failing to adjust the calculation to the specific year or property characteristics.

Cases Requiring Extra Caution

Certain situations demand a specialist approach, as standard criteria often fail. If you are in any of the following scenarios, we suggest a professional technical review before filing:

• Co-ownership between relatives or spouses: Where the fiscal allocation must be precise. Read more in our guide on Form 210 with several owners.
• Irregular periods: Rental contracts starting or ending mid-quarter.
• Ownership changes: Inheritances or changes in ownership structure that alter the depreciable base and acquisition dates.
• Regularization of previous years: If you have detected past errors, refer to our regularization guide.

Practical Review Method Before Filing

Before submitting your Form 210, follow this checklist:

1. Verify that the calculation basis matches your deeds and purchase expenses.
2. Ensure you have applied the percentage only to the building value (excluding land as per IBI).
3. Check that depreciation is proportional to the days the property was actually rented.
4. Confirm that you have all invoices and documents archived for future reference.

Frequently Asked Questions (FAQ)

Can I claim depreciation if the property is not rented?

No. Depreciation as a deductible expense in Form 210 is only applicable during the periods when the property generates rental income.

What percentage is normally applied?

As a general criterion in many cases, a 3% annual rate is used on the construction value, although this must be validated against the applicable rules and the specific facts of the case.

Where do I find the land value to discount it?

The most common source is the local Property Tax receipt (IBI) or the Cadastre website, where the land (suelo) and building (construcción) values are broken down.

What if I don't have the original title deeds?

This is a significant issue for justifying the calculation basis during a review. You should request an authorized copy from the Notary or an informative land registry report as a prior step to filing.

Legal Disclaimer: Information content of a general nature. The specific application of IRNR/Form 210 requires reviewing the case documentation and the regulations in force at the time of filing. Professional review is recommended.