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Spain taxes rental income from property differently depending on where the owner is tax-resident. If you live in the EU or the wider European Economic Area, you pay tax on the net figure, after deducting the costs of running the property, at 19%. If you live outside that bloc, an American, a post-Brexit Briton living in the UK, anyone tax-resident in a third country, you have been taxed on the gross rent, with nothing deductible, at 24%.
A 2025 ruling from Spain’s National High Court has called the worse half of that system unlawful. This guide explains what changed, what you may be able to reclaim, and the honest limits of it as of June 2026.
The two-tier system in numbers
Take a flat that earns €12,000 a year in rent.
- Non-EU owner (old treatment): 24% of the full €12,000 = €2,880, with no credit for the IBI (council property tax), community fees, insurance, repairs, or mortgage interest.
- EU/EEA owner: 19% of the net figure. After, say, €3,000 of deductible costs, tax is charged on €9,000 = €1,710.
Same flat, same tenant. The difference came down to the owner’s tax residence, not anything about the property.
What the court ruled
On 28 July 2025 the Audiencia Nacional (Spain’s National High Court) ruled in favour of a US resident who let out a flat in Barcelona and had been taxed on her gross rent (case SAN 3630/2025). Denying non-EU residents the deductions that EU residents already get, the court held, breaches Article 63 of the Treaty on the Functioning of the EU, the free movement of capital, which is the one EU freedom that also protects money moving to and from countries outside the bloc.
In plain terms: a non-resident from outside the EU who rents out Spanish property can now argue to be taxed the way an EU resident is, on the net figure after costs, and to reclaim tax overpaid in earlier years.
What you can deduct
Where the net basis applies, the costs directly tied to earning the rent come off before tax, in proportion to the period the property was let. These typically include:
- IBI (council property tax) and the rubbish charge
- Community of owners fees
- Buildings and contents insurance
- Repairs and maintenance (not improvements)
- Mortgage interest on the loan used to buy the property
- Depreciation of the building (commonly 3% of the higher of cost or cadastral value, excluding land)
- Agency and management fees, and supplies you pay as landlord
How the reclaim works
The route to recover tax overpaid in earlier years is a rectificación de autoliquidación (a formal request to correct a return you already filed) and, where tax was overpaid, a devolución de ingresos indebidos (refund of overpaid tax). The right generally reaches back four years and rolls forward, so each month you wait, the oldest reachable year drops off the end.
Two honest caveats
The rate gap has not closed. Non-EU owners still pay 24% where EU owners pay 19%. The ruling cracks the deduction, not the headline rate, so the gap narrows rather than disappears.
It is not settled law yet. The State Attorney has appealed the decision to the Tribunal Supremo (Supreme Court), and the tax authority has signalled it will keep rejecting these claims until that court rules. So a claim filed now should expect a refusal first, not a quick refund. The point of filing today is to preserve the years you can still reach, so that you are in the queue if the higher courts uphold the ruling, rather than losing the oldest years while you wait for certainty.
A separate change worth knowing
These deadlines apply to non-residents of Spain for tax purposes, with no permanent establishment in Spain, whose rental income leaves tax to pay. Tax residence decides it, whatever your nationality.
Grouping is optional. Spanish law taxes each accrual of rent separately. A qualifying owner may choose to group a year’s rental income from one property onto a single annual modelo 210; grouping by quarter ended with the 2024 tax year. The choice is recorded on each return, in the Agrupación box, and no registration or standing election carries it forward, so last year’s return shows how last year was filed without settling how this year’s income is declared. Grouping requires the same owner, the same property, the same income code, the same tax rate and the same payer. The same-payer condition is dropped only for rent not subject to withholding, which is declared with income code 35. Two properties cannot share one grouped return.
Separate filing means one return per accrual, per owner. Rent accrues when it falls due, or when it is collected if that is earlier. Monthly rent declared separately means one modelo 210 for each monthly payment, and each co-owner files their own share. The Agencia Tributaria‘s own worked example: rent received from June to September means one return in the July window and three returns in the October window. A holiday let paid in advance can accrue in an earlier window than the stay itself, and a platform’s payout date is not automatically the accrual date.
Updated September 2026: Orden HAC/623/2026 (BOE, 23 June 2026) moves the filing window for rental income with tax to pay to 1 to 20 April of the following year, for grouped and separate returns alike, with a transition for 2026:
- Grouped 2026 rental income files 1 to 20 April 2027.
- Income declared separately and accrued in April, May or June 2026 filed 1 to 20 July 2026.
- Income declared separately and accrued in July, August or September 2026 files 1 to 20 October 2026, on the existing form. Direct debit, when filing electronically, runs 1 to 15 October.
- Income declared separately and accrued in October, November or December 2026 files 1 to 20 April 2027, with direct debit from 1 to 15 April.
- Zero-result returns for 2026 rental income still file 1 to 20 January 2027.
The October 2026 and April 2027 windows are six months apart. If part of 2026 has already been filed separately, settle how the rest of the year is declared with your adviser, with the filed returns in front of you.
How to read a return already filed. On a rental modelo 210, the Agrupación box marked X means that return was grouped; Agrupación left blank with a Fecha de devengo (accrual date) filled in means it was filed separately. The Período/año box reads 0A on both, so it does not distinguish them. This tells you how that return was filed, which is background for the current year rather than the answer to it. Using a gestor does not transfer the obligation, since the owner remains the taxpayer, so keep copies of the filed returns and the payment receipts.
Empty or own-use property follows its own track. Imputed income for 2025 files between 1 January and 31 December 2026, and imputed income for 2026 between 1 April and 31 December 2027. From 1 January 2027 every return uses a revised form, whatever the accrual date, and an owner deducting expenses completes a new annex itemising them, which is worth watching if you are a non-EU landlord following the deduction litigation above. Confirmed September 2026 against the AEAT note on Orden HAC/623/2026, the AEAT non-resident taxation manual (updated 20 July 2026) and the AEAT completion examples for rental income.
What to do
The figures turn on what you can document, and the law is still moving, so this is a decision to put in front of a tax adviser before filing rather than a do-it-yourself afternoon. If you run a Spanish let from another country, in a language that is not yours, and the paperwork is the part that stalls you, this is exactly the kind of standing task the Waypoint Navigator service exists for.
Related guides
- Owning Rental Property on the Costa del Sol: The Risk Map
- Andalucía Tax Deductions for Expats
- How to File Your Renta in Spain
- The Year Before Spanish Tax Residency: A Planning Guide
This guide is general information and not individual tax advice. Filing deadlines confirmed September 2026. The SAN 3630/2025 ruling was under appeal when last checked in June 2026; confirm the current position with a qualified asesor fiscal before acting.
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