Non-resident rental tax in Spain 2026: the ruling that could save you thousands

By AmigoFix · May 2026 · 8 min read

If you are a British, American, Canadian, or other non-EU citizen who rents out a property on the Costa del Sol, you have been paying significantly more tax than your EU neighbours for the same rental income. A court ruling in July 2025 changed that, but the Spanish tax system has not caught up yet, and most foreign owners do not know about it.

This guide covers what changed, how much it could save you, and what you need to do before the filing deadlines pass.

The old system: taxed on every euro of income

Until the July 2025 ruling, non-EU property owners renting their Spanish property paid the IRNR (Impuesto sobre la Renta de No Residentes) at 24% on gross rental income with no deductions allowed. If your apartment earned 30,000 euros in rental income and you had 12,000 euros in legitimate costs (mortgage interest, community fees, IBI, insurance, repairs, property management fees), you still paid 24% on the full 30,000, which is 7,200 euros.

EU and EEA residents renting the same property paid 19% on net income after deducting those same costs. On the same figures, their tax bill was 19% of 18,000, which is 3,420 euros.

Same property, same income, same costs. The non-EU owner paid more than double the tax.

What the July 2025 ruling changed

On 28 July 2025, the Audiencia Nacional, Spain's National Court, ruled that this differential treatment breached EU free movement of capital principles and the non-discrimination clauses of several bilateral tax treaties. The court held that non-EU landlords must be allowed the same expense deductions as EU residents.

The ruling applies to property owners from any country with a tax treaty containing a non-discrimination clause with Spain. This covers British owners (under the UK-Spain tax treaty), American owners (US-Spain treaty), Canadian owners, Swiss owners, and nationals of most other non-EU countries with bilateral agreements.

What you can now deduct

• Mortgage interest on the Spanish property
• IBI (council tax)
• Community of owners fees
• Home insurance premiums
• Repairs and maintenance costs
• Property management and concierge fees
• Depreciation (amortisation of the building, excluding land value)
• Utility costs paid by the owner (electricity, water, internet) during non-rental periods
• Legal and accounting fees related to the rental activity

The catch: the tax portal does not support it yet

The Agencia Tributaria's Modelo 210 online filing system still blocks non-EU residents from entering expense deductions in the standard way. The software has not been updated to reflect the court ruling.

This means claiming your deductions currently requires filing an amended return (solicitud de rectificación) rather than a standard Modelo 210 submission. The rectification process is manual, must reference the specific court ruling, and is typically handled by a Spanish tax adviser or gestoría. It is not something most foreign owners can navigate alone.

The deadlines that matter

Rental income declaration window

Under Orden HAC/56/2024, rental income is now declared annually rather than quarterly. The filing window for 2025 rental income was 1 to 20 January 2026. For 2026 rental income, the window will be 1 to 20 January 2027.

Rectification window for past years

You can file rectification requests going back four years. That means in 2026, you can still claim refunds for overpaid tax in 2022, 2023, 2024, and 2025. This is the last year to claim a refund for 2022. If you paid 24% on gross income in any of those years, you may be entitled to a significant refund.

The imputed income tax: a separate obligation

Even when your property is not rented, non-resident owners in Spain must pay an annual deemed-income tax on the property's cadastral value. This is filed via Modelo 210 for each calendar year. The rate is 1.1% of the cadastral value (or 2% if the cadastral value has not been revised since 1994), taxed at 19% for EU residents or 24% for non-EU residents.

This tax applies to every non-resident property owner in Spain, whether they rent the property or not. Many foreign owners are not aware it exists until they try to sell the property and the notary asks for proof of prior-year filings.

What this means for your property setup

The tax ruling makes the first 90 days after purchase even more consequential. Every cost you incur that is properly documented and attributable to the rental activity is now deductible. That means community fee registration, utility registration, insurance, and property management agreements all have tax implications beyond their operational function.

Getting these set up correctly from day one, with proper documentation, invoices in your name, and SEPA mandates in place, is not just about convenience. It is about building the paper trail that supports your annual tax filing.

What to do now

If you are a non-EU property owner renting on the Costa del Sol, three actions matter.

First, engage a Spanish gestoría or tax adviser who is aware of the July 2025 ruling and can file on the new basis. Not all advisers have updated their processes. Ask specifically whether they are filing rectification requests under the Audiencia Nacional ruling.

Second, file rectifications for 2022, 2023, 2024 and 2025 if you paid 24% on gross income in those years. The four-year window is absolute: 2022 falls out of scope at the end of this year.

Third, ensure your property setup documentation is complete. Every deductible cost needs an invoice in your name, matched to the property address. If your utilities, insurance, or community fees are still in someone else's name or missing proper documentation, fix that now.