24% Spanish Property Rental Tax for Non Residents

24% Spanish property rental tax for non residents

Non-resident property owners in Spain may be surprised to learn about the 24% rental tax.

The current Spanish income tax rate for non-residents is 24% of gross income, with no deductions permitted for expenses.

EU residents have a reduced income tax rate of 19% with the possibility of deducting expenses.

This applies if these expenses are directly related to income obtained in Spain.

Spanish tax on rental income is an area of expertise for my team.

When it comes to Spanish property tax for non-residents, stay informed and avoid tax penalties with our guide.


What are the basics of Spanish tax on rental income?

Taxes in Spain are split between state, regional and local governments, with each of Spain’s autonomous regions deciding its own tax rates.

This means that Spanish tax rates vary across the country.

Under Spanish law, income and capital gains triggered by Spanish properties are taxable in Spain, whether they are realised by a resident or non-resident.

There are no separate taxes for income and capital gains in Spain.

I understand that you may find the subject of Spanish property tax for non-residents complex and confusing.

This is why I have a team on hand to assist you in keeping more of your money and losing less of it in tax payments.

My goal is to ensure that you pay the minimum Spanish tax on rental income.

Are you paying too much Spanish tax on rental income?

As a British ex-pat with property investments in Spain, I appreciate the need to approach the subject of Spanish property tax for non-residents with a professional and thorough outlook.

Although investing in Spanish rental property can be very profitable, landlords must take into account the tax on rental income and declare their earnings.

I also understand that you may be paying too much Spanish tax on rental income.

A non-resident is an individual who stays less than 183 days per calendar year in Spain.

If this applies to you, it is vital that you fulfil your obligations as you are liable to the Spanish Income Tax for Non-Residents called IRNR.

IRNR is a direct tax on the income obtained within the Spanish territory by individuals and organisations not residing in Spain.

Non-residents living in another state of the EU or the EEA who rent out their property in Spain have to pay a 19% income tax on the Net yield and not on the Gross rent.

These investors are able to deduct all of the expenses of the property, depending on the period that the property has been rented.

Some of the expenses that can be deducted include:

  •  Notary fees
  • IBI (property tax)
  • Garbage service tax
  • Property depreciation
  • Cost of repair & maintenance
  • Neighbour community fees
  • Interest on loans for the acquisition or improvement of the property

It is vital to get the right advice to ensure you are not paying more Spanish tax on rental income than you need to.

My team of experts can help you to navigate the area of Spanish property tax for non-residents with confidence.

If you’re a UK landlord looking to invest in Spanish property, I recommend that you read this guide.

How to pay less Spanish property tax as a non-resident

For tax purposes, the Spanish tax authorities consider any money you receive from letting a property as part of your taxable income.

It must be declared annually, and you are liable for tax.

It is important to first deduct eligible expenses and then if applicable, apply further deductions.

If your livelihood comes from Spanish rental income, it is considered property capital income and a different tax regime applies.

You must fulfil a series of conditions for this regime such as having a full-time employment contract for managing rental properties in Spain.

There are no IVA (VAT) taxes on rental income in Spain if the tenant uses them exclusively as a home.

The same exemption applies to the furniture, fittings, garage and any annexes.

If a property has mixed use, such as a home and office, IVA is applicable.

Expenses that you can deduct from your Spanish rental income include:

  •  Mortgage interest on loans for the purchase or refurbishment of the property
  • Costs associated with the purchase of the property, such as transfer tax and legal fees
  • Non-national taxes such as local council rates (IBI)
  • Upkeep and repair costs
  • Community fees
  • Insurance policy payments
  • Utility fees such as gas and electricity if you pay them not the tenant
  • Marketing costs if you promote your property on letting platforms

They will be taxed at 19% (for EU residents and Norway and Iceland) and 24% for non-residents (such as USA, UK, Canada and Mexico).

In the case of non-EU residents, no tax reductions will be applicable for these items so the tax rate will be applicable to the total amount of Spanish rental income received.

The Double Tax Agreement is an agreement that might have been signed by Spain and your country of residence.

The Spanish tax authorities make these double taxation treaties to check and regulate where residents and non-residents must pay tax.

I hope that you read this article on the UK-Spanish tax treaty, as it contains information that will be useful for UK landlords thinking about investing in Spanish property.

According to what is established in the OECD Convention model, the gross income generated through Spanish property must be taxed in Spain, regardless of the taxpayer’s tax residence.

My team are on hand to help you with Spanish property tax for non-residents and to ensure that you pay the right amount of Spanish tax on rental income.

What you should do next

If you read the information about Spanish tax on rental income in this guide and do nothing, it is possible that you will end up paying more Spanish property tax for non-residents than you need to.

I hope that you will book a time here to speak to my expert team so that they can start reducing your Spanish tax liability on rental income today.

Book a call to see how we can help you.


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