If you’re a non-EU investor considering real estate in Spain, you will first come across the concept of tax residency. In simple terms, a tax resident in Spain is someone who spends more than 183 days per year in the country, or whose main economic interests are located here. If you do not meet these conditions, you are considered a non-resident for tax purposes. This distinction is crucial because it determines how you are taxed when you buy property, especially if you plan to rent it out (i.e., for non-EU property investor tax deductions in Spain purposes).
A recent Spanish Audiencia Nacional ruling (28 July 2025) has changed the game for non-EU, non-resident landlords, giving them the right to deduct expenses on rental income under the impuesto sobre la renta de no residentes (IRNR).
Table of contents
- 1. Audiencia Nacional ruling - a turning point in IRNR taxation
- 2. How non-residents are taxed on rental income in Spain
- 3. What the new ruling changes for non-EU investors
- 4. Key steps if you are a non-EU property investor
- 5. Golden Partners: your partner in Spanish real estate and tax compliance
- 6. Frequently asked questions
- 6.1. Can non-EU residents deduct expenses on rental income in Spain?
- 6.2. What expenses can I deduct as a non-resident landlord?
- 6.3. What is the current tax rate for non-EU landlords in Spain?
- 6.4. What if I do not rent out my property in Spain?
- 6.5. Can I reclaim overpaid tax from previous years?
- 6.6. Is the ruling final or could it change?
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Audiencia Nacional ruling - a turning point in IRNR taxation
The decision of the Audiencia Nacional marked an important step towards equal treatment of property owners in Spain. Until now, non-EU landlords were unfairly taxed on their gross rental income, without the option to deduct expenses.
The court concluded that this was discriminatory, basing its judgment on EU treaty law and the non-discrimination clauses of double taxation agreements such as the one between Spain and the US. With this ruling, non-EU owners renting out property in Spain are now entitled to the same deductions as EU or EEA residents.
Although an appeal before the Supreme Court could follow, this ruling is already considered a major victory for foreign investors.
How non-residents are taxed on rental income in Spain
Non-residents who own property in Spain are subject to the IRNR. This tax applies both if you rent out your property or keep it vacant. Understanding the rules is key for investors who want to avoid surprises when considering non-EU property investor tax deductions in Spain.
Filing obligations and forms
Non-resident owners must file the modelo 210 form:
- If the property is rented, returns are filed quarterly.
- If the property is vacant, an annual return is required, calculated on an imputed rental value based on the cadastral value of the property.
Tax rates before the ruling
- EU and EEA residents paid 19% on net rental income, meaning they could deduct expenses such as maintenance, IBI, insurance, mortgage interest, or agency fees.
- Non-EU residents were taxed at a flat 24% on gross rental income, with no deductions allowed.
Taxation of vacant properties
When a property is not rented, the tax is calculated on a notional amount:
- 1.1% of cadastral value if recently updated.
- 2% otherwise.
This deemed income was taxed at 19% for EU/EEA and 24% for non-EU residents.
What the new ruling changes for non-EU investors
This ruling changes the landscape significantly. From now on, non-EU non-resident landlords:
- Can deduct expenses linked to their property, just like EU/EEA residents.
- Will be taxed on net rental income, not on gross.
- Benefit from a reduced rate of 19%, instead of the previous 24%.
This means non-EU investors finally enjoy a fairer and more balanced tax regime.
Strategic advantages for investors
- Lower effective taxation by offsetting real costs such as repairs, insurance, and taxes.
- Greater profitability of rental investments.
- Possibility to claim refunds for overpaid tax in previous years by requesting rectification of past filings.
Key steps if you are a non-EU property investor
If you already own property in Spain, or are considering buying:
- Review your past modelo 210 filings.
- Speak with a tax advisor to determine if you can reclaim past overpayments.
- Stay informed about potential appeals to the Supreme Court, but act now to protect your rights.
Golden Partners: your partner in Spanish real estate and tax compliance
At Golden Partners, we understand the challenges of investing in a foreign market. We provide full assistance to non-EU clients who wish to buy, rent, and manage real estate in Spain:
- Tax advisory and compliance: we ensure correct IRNR filing and maximize allowable deductions.
- Property acquisition support: from search to final purchase, we manage the process.
- Investment management: we handle the fiscal and legal side so you can focus on profitability.
With our help, your Spanish investment becomes safe, compliant, and profitable.
Frequently asked questions
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Can non-EU residents deduct expenses on rental income in Spain?
Yes. Since the Audiencia Nacional ruling of July 2025, non-EU property owners in Spain can deduct expenses under the impuesto sobre la renta de no residentes (IRNR) when renting out real estate. This means they now enjoy the same treatment as EU/EEA landlords, reducing their taxable base and improving investment profitability.
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What expenses can I deduct as a non-resident landlord?
Allowable deductions under IRNR in Spain include mortgage interest, local property tax (IBI), insurance premiums, repair and maintenance costs, utilities, and property management fees. These expenses must be supported by proper invoices or receipts, ensuring that only genuine costs linked to the property are applied.
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What is the current tax rate for non-EU landlords in Spain?
Following the new interpretation, non-EU landlords are taxed at 19% on net rental income, the same rate as EU and EEA residents. This replaces the previous 24% applied to gross income, significantly lowering the effective tax burden for international investors.
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What if I do not rent out my property in Spain?
Even if the property is empty, non-resident owners in Spain must file the modelo 210 annually. In this case, tax is calculated on an imputed rental income, which is a percentage of the cadastral value (1.1% if updated, 2% otherwise). This ensures the property still generates a minimum taxable amount even when vacant.
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Can I reclaim overpaid tax from previous years?
Yes. Many non-EU investors in Spain are now requesting rectification of past IRNR returns to recover taxes paid on gross rental income without deductions. If you have been taxed at 24% without applying expenses, you may be entitled to a refund, which can represent a significant saving.
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Is the ruling final or could it change?
The Spanish government may appeal the case to the Supreme Court, but the ruling is strongly supported by EU treaty principles and international tax agreements. For now, it provides a solid basis for non-EU investors to claim deductions and even refunds, while awaiting a possible final confirmation at higher judicial levels.
