Contents
- What Has Changed for Non-Residents
- What Expenses Can Be Deducted
- Important Details to Consider
For many years, non-tax residents in Spain paid a higher tax on rental income — 24% of every euro earned, with no right to deduct expenses. This situation is finally changing: a ruling by the National Court of Spain opens the door for non-residents to reduce their taxable base in the same way as residents. Read this expert summary from Laduchi Consult to learn how to take advantage of the new rules, optimize your taxes, and legally reclaim overpaid amounts.
What Has Changed for Non-Residents
Until July 2025, non-residents were required to pay a 24% tax on every euro of rental income without being able to deduct property-related expenses such as repairs, furniture, or insurance.
- Renovation
- Furniture
- insurance
Residents, on the other hand, enjoyed a more favorable system, as they could reduce their taxable base by deducting such costs.
On July 28, 2025, the Spanish National Court issued ruling SAN 3630/2025, which changed the landscape.
Now, non-residents are entitled to deduct property-related expenses under the same conditions as residents.
Practical Consequences:
- Refund of overpaid tax – Non-residents can apply for refunds for previous years, provided the statute of limitations has not expired.
- Equal tax rights with residents – Maintenance and property expenses can now be offset against rental income.
- Accounting for property expenses to reduce rental income tax
What Expenses Can Be Deducted
Non-residents renting out property in Spain can now deduct the following expenses:
- Depreciation of property and furniture
This allows accounting for wear and tear of the building and furnishings used for rental purposes. It covers
- major repairs
- replacement of furniture
- appliances, and equipment
Depreciation can be spread over several years, reducing taxable rental income annually.
- Community fees and utilities (communidad)
Payments for
- maintaining elevators
- cleaning common areas
- security
- shared facilities
It is crucial to keep invoices and proof of payment.
- Property tax (IBI) and municipal charges
- IBI is an annual municipal tax based on cadastral value.
- Municipal charges include waste collection, water supply, and other mandatory local taxes.
- Maintenance and repair costs
Any ongoing repairs needed to keep the property in rentable condition, such as
- painting
- plumbing
- window replacement
- minor furniture repairs
Capital improvements that increase the property’s value are excluded (these fall under depreciation).
- Insurance and related services
- Property insurance
- liability protection
- contents insurance
Important Details to Consider
Currently, the question remains open as to whether non-residents can utilize:
- The question of whether non-residents can apply the 60% tax reduction for the long-term rental of primary residences and benefit
- from the reduced 19% rate instead of the 24% rate remains unresolved.
At this stage, Spanish tax authorities are rejecting such refund requests and preparing an appeal before the Supreme Court.
If the ruling is upheld, the right to refunds may only apply from the date of the court decision.
Laduchi Consult experts recommend filing your application now to avoid losing the opportunity to recover overpaid taxes.
Conclusion
The decision of the Spanish court effectively equates the tax rights of non-residents with those of EU residents.
The new rules create an opportunity for tax reduction and the refund of overpaid amounts, although this requires correct and timely action.