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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. 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.
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, and 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, or minor furniture repairs. Capital improvements that increase the property’s value are excluded (these fall under depreciation).
- Insurance and related services – Property insurance, including building coverage, contents insurance, and liability protection.
Important Details to Consider
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.
The ruling SAN 3630/2025 effectively equalizes tax rights between non-residents and EU residents. To fully benefit from these new tax opportunities, submit your application to apply this ruling to your situation today.
FAQ
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A fiscal resident in Spain is a person who spends more than 183 days per year in the country or has their main economic interests based there. Residents pay IRPF (personal income tax) on their worldwide income at progressive rates. Non-residents, by contrast, pay IRNR (non-resident income tax) only on income generated in Spain — for example, rental income from a Spanish property — at a flat rate of 24%.
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Non-residents pay IRNR at a flat rate of 24% on rental income from Spanish property. Until July 2025, this tax was applied to the gross income with no expense deductions allowed — unlike residents, who could offset costs such as repairs, insurance, and IBI. The ruling SAN 3630/2025 changed this, granting non-residents the same right to deduct property-related expenses before the tax is calculated.
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The ruling issued by Spain's National Court on 28 July 2025 effectively equalised the tax treatment of non-residents and residents. Non-residents renting out property in Spain can now deduct the same expenses as residents: property depreciation, communal fees, IBI, maintenance and repairs, and insurance. This means a significantly lower taxable base and, in many cases, the right to claim a refund for overpaid tax in previous years.
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Following the SAN 3630/2025 ruling, non-residents can deduct the following costs from their rental income: depreciation of the property and furniture, communal maintenance fees (comunidad), the annual IBI property tax and municipal charges, ongoing repair and maintenance costs, and property insurance. Capital improvements that increase the property's value are not deductible as current expenses but may be spread over time through depreciation. All deductions must be supported by documentation.
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IBI (Impuesto sobre Bienes Inmuebles) is the annual municipal property ownership tax in Spain. Its amount depends on the cadastral value of the property and the rate set by the local municipality. Since the SAN 3630/2025 ruling, non-residents may include the IBI they pay as a deductible expense when calculating IRNR on rental income, which directly reduces the amount of tax owed.
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IRPF (Impuesto sobre la Renta de las Personas Físicas) is the personal income tax applied to tax residents in Spain. It uses a progressive scale and allows a broad range of personal and expense deductions. IRNR (Impuesto sobre la Renta de No Residentes) is the equivalent tax for non-residents, historically charged at a flat 24% rate with no deductions. The SAN 3630/2025 ruling narrows this gap significantly by granting non-residents the right to deduct property expenses under the same conditions as residents.
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Yes — but acting promptly is essential.
Non-residents who overpaid IRNR on rental income in previous years can apply for a refund within the statute of limitations. At present, the Spanish tax authority is preparing an appeal to the Supreme Court, so if the ruling is upheld, the refund window may be capped at the original ruling date. Laduchi Consult experts recommend filing your claim now to preserve your right to a refund before any potential restriction takes effect.
Please note that all materials contained on this site have been prepared for informational purposes only. This data does not constitute or replace professional financial, legal or tax advice. The information is general in nature and does not take into account your personal circumstances. Always seek professional advice from officially licensed professionals: financial advisors, accountants and lawyers.
