Rental Income Tax Spain
Understanding how rental income from Spanish property is taxed.
How Rental Income is Taxed
Rental income from Spanish property is taxable in Spain regardless of where you live. The rules differ significantly depending on whether you're a Spanish tax resident or a non-resident.
For residents, rental income is included in your annual Modelo 100 declaration. For non-residents, you file quarterly using Modelo 210 through the Agencia Tributaria website.
Both can claim deductions, but non-EU residents face restrictions that can significantly increase their effective tax rate.
Residents: Annual Declaration
As a Spanish resident, include gross rental income in your annual tax return. You can deduct allowable expenses to arrive at net taxable income.
Deductible expenses include: mortgage interest, property taxes (IBI), insurance, repairs and maintenance, community fees, management fees, and depreciation (3% of construction value, excluding land).
If net income is positive, apply a 60% reduction for long-term residential rentals - you only pay tax on 40% of the profit.
Non-Residents: Quarterly Filing
Non-residents must file quarterly tax returns for rental income. EU/EEA residents pay 19% on net income (after deductions). Non-EU residents pay 24% on gross income without deductions.
This difference is significant: a €12,000 annual rental income with €6,000 expenses means €1,140 tax for EU residents vs €2,880 for non-EU residents.
File by the 20th of the month following each quarter: April 20, July 20, October 20, January 20.
Allowable Deductions (EU/EEA Non-Residents)
EU/EEA non-residents can deduct expenses directly related to the rental income. This includes property management fees, cleaning costs, utilities (if paid by you), repairs, and insurance.
Mortgage interest is deductible but only proportionally - if the property is rented 6 months and empty 6 months, only 50% of the annual interest qualifies.
Keep detailed records and receipts. The tax office may request documentation during an audit.
Short-Term vs Long-Term Rentals
Long-term residential rentals (minimum 1 year) qualify for the 60% reduction for residents. Holiday rentals and short-term lets don't qualify.
Airbnb and vacation rentals have additional registration requirements in many Spanish regions. Non-compliance can result in fines.
Some municipalities have restricted or banned short-term tourist rentals - check local regulations before renting.
Don't Forget Imputed Income
For periods when the property is empty (not rented), non-residents must pay imputed income tax based on the cadastral value. You can look up your property's valor catastral on the Catastro website.
This applies even if you're filing rental income for other periods. Calculate the imputed income proportionally for vacant days.
Residents don't pay imputed income on their main home but do on second properties when not rented.
Disclaimer
This guide is for informational purposes only and does not constitute legal, tax, or financial advice. Tax laws and regulations in Spain may change, and individual circumstances vary. We accept no liability for decisions made based on this information. Always consult with a qualified tax professional for advice specific to your situation.