Non-EU Owners Can Now Deduct Rental Expenses in Spain

Non-EU Owners Can Now Deduct Rental Expenses in Spain

Big news for non-EU property owners renting in Spain: a Spanish court has ruled it is unlawful to stop you deducting expenses such as repairs, community fees, insurance and mortgage interest from your rental income.

Until now, EU/EEA residents paid 19% on net income, while non-EU owners (including Brits since Brexit) paid 24% on gross income, with no deductions.

This ruling changes that and also opens the door to claim back overpaid taxes from the last 4 years.

The 24% vs 19% tax rate issue is still under review, but this decision is already a major step towards fairness.

What do you think? Will you be claiming a refund? Share your thoughts below.

We are UK residents. We bought our house in Malaga Province in 2015 and each year my wife and I each pay a nominal annual non-resident tax based upon the cadastral. I have just paid 

The property is not directly relevant to your article because it is a holiday home used only by family and close friends, but I had previously been advised that Spanish properties in foreign ownership are liable to pay this federal tax because the system assumes that there will always be an element of rental income. Is this still the case?

Best regards

Steve

Yes, that’s right. For non-resident owners in Spain, the tax system distinguishes between two different situations:

1. When the property is not rented out (holiday home, used only by owners, family or friends): you must file the annual Modelo 210 for imputed rental income. This isn’t based on any real income but on a notional amount calculated from the cadastral value. That’s the “nominal” non-resident tax you’ve been paying.

2. When the property is rented out: instead of the imputed income, you must declare the actual rental income received. EU/EEA residents can deduct certain expenses, while non-EU owners cannot.

So in your case, because the house is only for personal or family use, the small yearly Modelo 210 return is exactly what you’re supposed to do.

It often confuses people, but the key is: imputed tax applies only if you don’t rent it, real rental tax if you do.

Hello everyone

Hi Maria,

That's good news, it was rather unfiar to people who love Spainbut happen to be British.

We sold 'Casa Bella' in Mrch Last year but did have ssome rentals 'Post Brexit'.

Could you please confirm the date we can go back to - you say four years. Are these Tax years or is there a start date for rentals i.e. when the changes became effective?

How best to make the claim?

Thanks,

Mike and Helen

Hi Mike and Helen:

You can go back 4 years from the date each IRNR return was filed, not just 4 tax years. Example: a 2021 rental return filed in Jan 2022 can be claimed until Jan 2026.

You need to file a rectification of the IRNR return and request a refund of undue income, with proof of your rental expenses.

That’s great news! Do you know if there’s a specific process or form to claim those refunds for past years?

Chiikawa Puzzle 

Sure! Here below the requested info:

What

• File an amended Form 210 for each affected period.

• Request a refund for undue payments (you were taxed on gross; claim tax on net: rents – deductible expenses).

• Applies to non-resident landlords, including non-EU, following recent case law aligning deductions with EU/EEA treatment.

• Look-back: last 4 non-expired years.

How

1. For each period: compute net income (rents – expenses like IBI/local rates, community fees, insurance, mortgage interest, repairs/maintenance, management fees, depreciation of the building).

2. Prepare docs: lease(s), rent receipts, invoices + proofs of payment, deed/land registry extract, ID (NIE/passport), tax residence certificate (if needed), bank details.

3. Submit online (digital ID) or via representative: tick “rectification/amendment” in Form 210 and attach the evidence.

4. Include the refund request in the same filing.

Notes

• Filing now helps stop the statute of limitations.

• No invoice = no deduction. Ask providers for duplicates if missing.

• This is general info, not legal advice.