Good news for individuals residing outside the EU: they may now be able to deduct expenses related to the rental of their property in Spain for tax purposes. Until now, only taxpayers residing in the EU, as well as in Iceland, Norway and Liechtenstein, were permitted to deduct expenses related to the rental of property in Spain, subject to the applicable legal requirements.

The applicable rules, however, placed individuals residing in third countries, i.e. outside the EU or EEA, at a disadvantage.

For example, a person residing in Switzerland who rented out a property in Spain was previously unable to deduct the expenses associated with the rental.

This constituted discrimination that had not previously been officially recognised. However, in its judgment of 28 July 2025, the Spanish National Court (Audiencia Nacional) confirmed the legal position advocated by tax advisers: non-EU residents may also deduct expenses arising from the rental of their property.

It should be emphasised, however, that the judgment is not yet final, and it remains to be seen whether it will ultimately become legally binding.

At the same time, this opens up the possibility for non-resident taxpayers to claim a refund from the Spanish Tax Agency for amounts unduly paid, provided that they fall within the statutory four-year limitation period and the applicable legal requirements are met.

Despite the judgment, the Spanish Tax Agency has not yet changed its existing practice. Therefore, as a general rule, it will continue to take the position that non-EU residents are not entitled to deduct expenses related to the rental of their property.

 

Regardless of whether a taxpayer is resident in the EU, the EEA or outside these territories, proving that expenses are deductible can be a challenging task. We also address this issue in our article “Which expenses are deductible for a European citizen renting out property in Spain?”.

In this article, we have summarised which expenses are deductible and which substantive and formal requirements must be met for the Spanish Tax Agency to accept them.

As this is a complex area of taxation, we recommend having each individual case reviewed by an experienced professional.

If you have any questions regarding this article or Spanish Modelo 210, please feel free to contact us or consult our range of services.

Our law firm will be pleased to assist you in analysing your individual circumstances, handling the necessary administrative procedures on your behalf and assisting you with the preparation and filing of the corresponding tax returns. Should you be interested in our services or have any specific questions regarding this matter, please feel free to contact us by email or telephone.

Author: 

J. Francisco Santos Postigo
Lawyer
CEO, Partner, Director Labour Law
info@sspartners.es
Tel: (+34) 951 12 13 06
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