What Does This Mean for Non-EU Landlords?

On 28 July 2025, Spain’s Audiencia Nacional (National Court) delivered a historic ruling that changes the way non-EU, non-resident property owners are taxed in Spain.

Until now, a clear disparity existed:

• EU/EEA landlords were able to deduct rental-related expenses and pay 19% tax on their net rental income.

• Non-EU landlords, however, were taxed at a higher 24% rate on gross rental income, without being allowed to deduct a single euro in expenses.

The Court has now declared this practice discriminatory and contrary to EU law—specifically, the principle of free movement of capital (Article 63 TFEU).

What Does This Mean for Non-EU Landlords?

If you are a non-resident, non-EU property owner renting out your Spanish property, you now have the same rights as EU owners to deduct legitimate rental expenses, including:

• Mortgage interest

• Repairs and maintenance

• Insurance premiums

• Community fees

• Local property taxes (IBI, basura, etc.)

• Utilities

• Property management costs

The 24% tax rate still applies, but it will now be calculated on net rental income, after expenses.

Can You Claim a Refund for Previous Years?

Yes. This ruling has retroactive effect. Non-EU landlords can request a rectification of past tax returns (Modelo 210) for up to the last four years, claiming back overpaid tax on expenses that were previously disallowed.

Why Is This Important?

This decision brings long-awaited fairness for thousands of non-EU owners, particularly from countries such as the UK, USA, Canada, and others, who have long faced an unequal tax burden.

It also shows once again the importance of being properly advised: EU law protections can often be enforced even when Spanish tax rules seem restrictive.

How SGM Abogados Can Help

At SGM Abogados, we specialise in assisting international property owners. Our tax team can:

• Review your past Modelo 210 filings

• Identify deductible expenses

• Prepare and submit rectification claims to recover overpaid tax

• Ensure your future filings comply with the new ruling

📌 If you are a non-EU landlord with rental income in Spain, this ruling could mean thousands of euros back in your pocket. Contact our team today to review your case and claim what is rightfully yours.