SUMMARY

For non-residents in Spain residing in other EU countries (as well as Norway and Iceland), a tax rate of 19% is applied to this type of income. Residents of non-EU countries, including the United Kingdom, pay 24% (on income earned after January 1, 2021).

Citizens of EU member states, as well as Norway and Iceland, can deduct the following costs: community fees, municipal taxes, insurance, water, electricity, mortgage interest, real estate agency fees, cleaning and laundry, maintenance, and repair costs. This is not an exhaustive list, but these are the costs that the tax office does not usually question. You may only deduct the proportional part of the costs corresponding to the number of days the property was rented out. And, of course, you can only deduct costs that you pay, not those that are the responsibility of the tenant.

The purchase of furniture and appliances is also deductible, but it is not treated the same way as maintenance costs; instead, it is classified as a fixed asset (“inmovilizado”). This means that the total amount paid for the “item” cannot be deducted immediately, but only a portion can be deducted annually (over several years, depending on the item purchased). Therefore, if you paid for a new television, sofa, fridge-freezer, etc., provide the data, and the accountant will apply the appropriate amounts in accordance with the local tax authority’s requirements.

Maintenance and repairs: You can deduct these expenses from your rental income, but only if you receive an official invoice including VAT, and this is only valid if the property is used exclusively for rental activities.

Improvements: These are not considered maintenance costs and cannot be deducted from the rent. Instead, they may be deductible under capital gains tax when the property is sold. However, specific criteria must be met, such as having the necessary building permits, declaring the improvements before a notary, or providing proof of energy performance improvement certified by a qualified professional. (In the case of apartments, this is practically hopeless/impossible.)

You CANNOT deduct the costs of traveling to/from Spain.

Residents of countries outside the EU (with the exception of Norway and Iceland) CANNOT deduct any costs!

Yes. This is the Non-Resident Income Tax. According to Spanish law, income derived from the rental of property located in Spain must be taxed in Spain. Agreements to avoid double taxation are in place between Spain and most European countries, so you won’t have to pay twice (what you pay in Spain is deductible from what you have to pay on the same income in your own country).

Until December 31, 2023, rental income had to be declared quarterly, within 20 days following the end of each natural quarter. However, rental income earned since January 1, 2024, can be declared annually. This amendment was largely requested by non-residents as it rectified previously unfair and inconvenient discrimination compared to residents. It is important to note that the option to declare and pay the tax quarterly still exists. However, given that fees must be paid for each declaration, it is advisable to choose the annual declaration. Income earned during 2024 must be declared by January 15, 2025.

PLEASE NOTE THAT THE TAX MUST BE PAID AT THE SAME TIME THE DECLARATION IS SUBMITTED.

You must also file an annual tax return by the end of each year (by the end of 2024 for the year 2023) even if you do not earn any actual income from the property at all.

The deadlines mentioned in the previous question are very clear. If you pay even one day late, the tax office will send you a “late payment penalty,” which can include late interest of up to 20%.

You must declare the total amount of rent paid by the tenant/guest, and you can deduct the commission or fees charged by the agent. But the income is the total amount paid by the tenant.

The tax information on this page is for informational purposes only! The editor of this page assumes no responsibility for any errors that may occur. For precise information, please consult your accountant!