taxes

How is rental income from Spanish property taxed?

Rental income from Spanish property is taxed differently for residents and non-residents.

Non-residents pay a flat rate of 19% (EU/EEA/Swiss residents) or 24% (non-EU) on rental income via quarterly Modelo 210 filings.

EU residents can deduct proportional expenses (mortgage interest, repairs, insurance, community fees, IBI, depreciation) from gross rental income.

Non-EU residents pay tax on gross income with no deductions.

Residents include rental income in their annual IRPF tax return at progressive rates (19-47%), but benefit from a 50% reduction on net rental income from long-term lets (was 60%, reduced by recent law).

Allowable deductions for residents include all property-related expenses plus depreciation of 3% of the building value.

For tourist/holiday rentals, you also need a tourism license, must charge IVA in some cases, and the 50% reduction doesn't apply.

WOW-Estates can connect investors with tax advisors who specialize in rental income optimization.