Good news for non-EU property owners in Spain
A recent ruling by Spain’s National Court could make a big difference for international property investors. For the first time, non-EU citizens renting out property in Spain may be able to deduct their expenses for tax purposes under the Non-Resident Income Tax (IRNR), just like EU residents.
What has changed
Until now, only landlords from the European Union or the European Economic Area could deduct costs such as repairs, maintenance, property management and mortgage interest from their Spanish rental income before paying tax. Owners from outside the EU, including the United Kingdom, US, Canada, Asia, the Middle East and Latin America, were excluded from these deductions.
That has now been challenged. The National Court ruled that this unequal treatment restricts the free movement of capital, a principle protected by European law. In simple terms, Spain cannot impose a heavier tax burden on landlords simply because they live outside the EU.
Although the ruling could still be appealed to the Supreme Court, it represents an important step toward fairer treatment for international investors. If confirmed, it would also allow non-EU owners to claim refunds for recent tax years that have not yet expired.
Why this matters to you
If you are a non-EU resident with rental property in Spain, this decision could improve the profitability of your investment. Being able to deduct legitimate expenses means you would only pay tax on your net rental income, not the full amount received. For many landlords, this could mean a significantly lower annual tax bill.
It also offers reassurance that Spain’s property market is aligning more closely with the principles of equal treatment and transparency, which strengthens confidence for overseas buyers.
The bigger picture
The timing of this ruling is particularly important. Earlier this year, a draft law was presented in the Spanish Parliament proposing a new state tax on property sales by non-EU residents. In its original form, the measure suggested a 100% surcharge — in practice, making it impossible for non-EU owners to sell without losing the full value of their property.
Legal experts immediately highlighted that such a tax would likely breach EU law and even Spain’s own constitution. The recent court ruling reinforces this view, showing that discrimination based on residency will not be accepted in today’s property market.
What happens next
The July decision is not yet final, as the case could still go to the Supreme Court. But it already sets an important precedent. For non-EU landlords, it opens the door to reclaiming overpaid taxes in recent years. For future buyers, it signals a move toward a fairer, more secure environment for investing in Spanish real estate.
At NVOGA, we encourage our clients to stay ahead of legal and tax developments that may influence their investment decisions. Spain continues to attract international buyers, and rulings such as this one reinforce the importance of a fair and competitive property market.
For non-EU owners, including UK residents after Brexit, the decision is a positive step. It ensures equal rights to deduct expenses on rental income and reflects Spain’s commitment to maintaining an open and secure environment for global investors.
If you are considering buying property in Spain, our team at NVOGA can guide you through every stage. With the support of our trusted network of legal and tax professionals, we make sure our clients have clear, up-to-date advice to protect and enhance their investment. Contact us today to discuss your property goals and explore the opportunities Spain has to offer.