How much are the real taxes on tourist rentals in Formentera: simulation with real numbers

Those who purchase a property in Formentera with the aim of renting it out during the summer season almost always focus on the potential earnings: occupied weeks, nightly rate, gross income. It is the right calculation to start with, but it is incomplete if it is not accompanied by an equally precise estimate of the tax burden. Taxes on tourist rentals in Spain are not trivial, and for a non-resident, the framework is complex and multi-layered. This article explores it with concrete numbers.

The reference profile

To make the simulation useful and realistic, let’s start with a typical case for Formentera: a villa with an active ETV license, purchased by an Italian citizen who is not a tax resident in Spain. The property is rented out for 10 weeks during the high season, with an average rate of 4,000 euros per week. The cadastral value of the property is 150,000 euros.
Gross annual rental income: 40,000 euros.

The taxes on rental income: IRNR

The non-resident owner who rents in Spain pays the IRNR (Impuesto sobre la Renta de No Residentes) on the rents received. The rate for residents of the European Union is 19%.
The taxable base, however, depends on an important detail: EU residents can deduct costs directly related to the rental activity, while non-EU residents pay on the gross amount without any deductions.

Deductible costs for EU residents

Included in the deduction are expenses directly attributable to the rental: mortgage interest (if applicable), ordinary and extraordinary maintenance costs, insurance premiums, management agency commissions, cleaning costs, utilities charged to the owner, IBI proportionate to the days rented, and depreciation of the property and furnishings. Property depreciation is calculated at 3% per year on the construction value (excluding land), and often represents the most significant deduction.

Simulation with deductions

Estimated annual documented costs proportionate to the rental period:
Management agency commission (20% of income): 8,000 euros
Maintenance, cleaning, utilities: 3,500 euros
Proportionate insurance: 600 euros
Proportionate IBI (10 weeks out of 52): 480 euros
Property depreciation (estimated construction value 400,000 euros at 3%, proportionate to rented weeks): 2,308 euros
Total deductible costs: approximately 14,888 euros.
IRNR taxable base: 40,000 − 14,888 = 25,112 euros.
IRNR due at 19%: approximately 4,771 euros.
Without deductions, a non-EU resident would have paid 24% on 40,000 euros, amounting to 9,600 euros. The difference is substantial.

The tax on imputed income: the periods not rented

This is the aspect that surprises those who are not familiar with Spanish taxation the most. Even for the weeks when the property is not rented out but is available to the owner, the Spanish state assumes a notional income on which the IRNR is paid.
The taxable base for non-rented periods is equal to 2% of the cadastral value of the property (or 1.1% if the cadastral value has been revised after 1994). On this basis, the rate of 19% is applied.

Simulation on the imputed income

Our villa has a cadastral value of 150,000 euros. The 10 rented weeks represent 70 days out of 365. The days available to the owner are therefore 295.
Annual notional base: 150,000 × 2% = 3,000 euros.
Proportion for the days not rented: 3,000 × (295/365) = 2,425 euros.
IRNR on the notional income at 19%: approximately 461 euros.

IBI: the annual property tax

The IBI (Impuesto sobre Bienes Inmuebles) is owed by any owner regardless of the use of the property, residency, or nationality. It is calculated on the cadastral value with a rate set by the Municipality. In Formentera the rate generally falls around 0.5–0.7% of the cadastral value.
Indicative IBI on our villa: 150,000 × 0.6% = 900 euros per year.

Mandatory requirements: SES Hospedajes and NRA

These are not strictly taxes, but they involve management costs that affect the net yield. The communication of guest data through SES Hospedajes requires either dedicated software or the support of a management platform. The maintenance of the NRA code, the quarterly completion of Form 210, and the management of annual obligations (including Form N2) require an accountant or a specialised manager. The annual cost of this administrative management for a villa in Formentera generally falls between 1,500 and 3,000 euros, depending on the complexity.

The summary: from gross income to net after tax

Gross rental income: 40,000 euros
Deductible operating costs (agency, maintenance, utilities, insurance): − 12,100 euros
IBI: − 900 euros
IRNR on rental income: − 4,771 euros
IRNR on imputed income: − 461 euros
Administrative management (accountant, compliance): − 2,000 euros
Estimated net income: approximately 19,768 euros.
The pure tax burden (IRNR on rental + IRNR on imputed income + IBI) amounts to approximately 6,132 euros, equal to 15.3% of gross income. If operating and administrative costs are also considered, the net margin stands at around 49% of the gross — a return that is competitive for the Formentera market, but requires professional management to be maximised.

The factors that affect the calculation

High cadastral value

In Formentera, many properties have relatively low cadastral values compared to market values, which limits the impact of IBI and imputed income. Properties with recently updated cadastral values may present a greater incidence from these two items.

Presence of a mortgage

For EU residents, interest payments on a mortgage taken out to purchase the property are deductible from the IRNR base. For those who have financed the purchase, this deduction can significantly reduce the tax due on rental income.

Tax residency in Spain

Those who transfer their tax residency to Spain cease to be subject to IRNR and move to IRPF (Impuesto sobre la Renta de las Personas Físicas), with progressive rates starting from 19% and rising to 47% for higher incomes. In this case the calculation changes radically and requires specific planning.

Corporate structure

For those who manage the rental through a Spanish SL, the applicable tax is the Impuesto sobre Sociedades at 25% on the net profit, with the possibility of deducting property depreciation in a more structured way. For high revenues and management of multiple properties, this structure can prove fiscally more efficient.

What to do before purchasing

Before finalising a purchase for rental purposes in Formentera, it is useful to build a personalised simulation that takes into account the actual cadastral value of the property, the expected income based on location and type, the purchase structure (individual or SL), the buyer’s tax residency, and realistic operating costs for managing the property. A well-done simulation transforms an investment idea into an informed decision.
We at yourformentera.es regularly work with tax advisors specialised in international real estate investments. If you are considering a purchase and want to understand the real numbers first, contact us.

Article updated as of April 2026. The reported tax data is indicative and based on the regulations in force at the date of publication. The rates and taxable bases may vary. Always consult a qualified tax advisor before proceeding with any operation.