Spain Court Levels Tax Rules for Non-EU Property Owners

Non-EU residents renting out property in Spain may now be able to deduct expenses against their rental income. On 28 July 2025, Spain’s Audiencia Nacional (National Court) ruled that this right should extend to non-EU owners, not just EU and EEA residents.

What Changed?

Non-EU owners were previously taxed at 24% on gross rental income with no deductions. The court ruled this unequal treatment, compared to EU/EEA owners taxed at 19% on net income, was discriminatory.

Who Is Affected?

The ruling applies to non-EU (third-country) residents who rent out Spanish property. It levels the playing field with EU/EEA residents and may lead to significant tax savings.

What Non-EU Owners Need to Know

• Deduction rights: Non-EU owners can now deduct legitimate rental expenses from taxable income.

• Refunds possible: Many may be able to claim refunds for overpaid tax from past years, typically going back to July 2021.

• Still under appeal: The ruling is not yet final. The Spanish Supreme Court will have the last word, so outcomes may change.

• Future implications: This strengthens arguments against other tax proposals aimed at non-EU buyers, such as the planned 100 % “Complementary State Tax.”

Key Takeaway

If you are a non-EU property owner in Spain, this ruling may reduce your tax burden and open the door to reclaiming past overpayments. However, since the decision is under appeal, it is important to seek professional advice before making refund claims or adjusting tax strategies.

In this video I discuss the above with Peter Franke, partner at Franke & de la Fuente Lawyers in Marbella