Spain may be forced to change how it taxes second homes for non-residents. The European Commission has opened an infringement case against Spain over its tax rules on second homes owned by non-residents, including many foreign property owners. The EU claims Spain’s system may discriminate against non-residents, violating core European Union principles, according to El Pais
Why Is the EU Investigating Spain’s Property Tax Rules?
Under current Spanish tax law, owners of second homes that are not rented out must pay tax on a theoretical income, as if the property were generating rental income, even if it isn’t. This applies to both Spanish residents and foreigners, but non-resident owners may end up paying higher taxes or facing less favourable conditions.
The European Commission argues that this could violate EU laws on the free movement of capital and the equal treatment of EU citizens.
What Happens Next?
Spain has received a letter of formal notice—the first step in an EU infringement procedure. The government has two months to respond and either amend the legislation or justify its position.
If Spain fails to act, the European Commission could take the case to the Court of Justice of the European Union (CJEU), potentially forcing Spain to revise its tax rules for non-resident property owners.
Why This Matters for Foreign Homeowners in Spain
This case has major implications for the thousands of EU and non-EU citizens who own second homes or holiday properties in Spain. If the European Commission prevails, Spain may be required to adjust its tax treatment of non-residents, possibly leading to lower tax burdens for some foreign owners.
The timing is also significant: Spain is actively debating higher taxes on vacant and underused properties to improve housing availability. That could increase pressure on foreign second-home owners, especially if they are being taxed differently from residents.
Key Takeaways
The EU is challenging Spain’s tax on non-resident-owned second homes.
Spain has 2 months to respond before facing possible legal action.
The outcome could affect foreigners who own property in Spain but live elsewhere.
If you’re a non-resident property owner in Spain, this is a case to watch closely.
