20.09.2024 
If you have decided to rent out your property in Spain, it is important to be aware of the tax obligations related to rental income. The rates and tax rules depend on your residency status and country of origin. In this article, we will explain which taxes need to be paid, how they are calculated, and what deductions are available.
Basic rental tax rules
For residents of Spain
If you are a tax resident of Spain, rental income is subject to personal income tax (IRPF). It is calculated on a progressive scale: the higher your total income, the higher the tax rate.
- Tax scale for 2024:
- Up to 12,450 euros: 19%.
- From 12,451 to 20,200 euros: 24%.
- From 20,201 to 35,200 euros: 30%.
- From 35,201 to 60,000 euros: 37%.
- Over 60,000 euros: 47%.
For non-residents of Spain
If you are not a tax resident of Spain, rental income is taxed at a fixed rate:
- 19% — for residents of EU/EEA countries.
- 24% — for residents of other countries.
Deductions and tax benefits
For residents of Spain
Residents can deduct from the taxable base the expenses related to maintaining and servicing the property:
- Repair costs.
- Utility payments (if paid by the owner).
- Mortgage interest.
- Insurance costs.
- Property depreciation (3% of the building value).
Long-term rental discount: If the lease lasts for more than one year and the property is used by the tenant as their primary residence, the owner is granted a 60% discount on the taxable base.
For non-residents
Residents of EU/EEA countries can also deduct property-related expenses (similarly to residents of Spain). Non-residents from other countries do not have this option — the tax is calculated on the total income without any expense deductions.
Example of tax calculation
Example for a resident of Spain
- Annual rental income: 10,000 euros.
- Deductible expenses: 3,000 euros.
- Taxable base: 10,000 - 3,000 = 7,000 euros.
- Tax rate: 19%.
- Tax amount: 7,000 × 19% = 1,330 euros.
Example for a non-resident (from the EU)
- Annual rental income: 10,000 euros.
- Deductible expenses: 3,000 euros.
- Taxable base: 10,000 - 3,000 = 7,000 euros.
- Tax rate: 19%.
- Tax amount: 7,000 × 19% = 1,330 euros.
Example for a non-resident (outside the EU)
- Annual rental income: 10,000 euros.
- Taxable base: 10,000 euros (no deductions apply).
- Tax rate: 24%.
- Tax amount: 10,000 × 24% = 2,400 euros.
How to pay the tax?
For residents of Spain
- Rental income is included in the annual tax return, which is filed via Modelo 100.
- The return must be filed by June 30 of the following year.
For non-residents of Spain
- The tax is paid quarterly via form Modelo 210.
- Filing deadlines: by the 20th day of the month following the end of the quarter (for example, for the first quarter, the return is filed by April 20).
Liability for non-payment
Spain strictly monitors the taxation of rental income. Late filing of returns or non-payment of taxes may result in penalties:
- For late filing: from 50 to 200 euros.
- For non-payment of taxes: up to 20% of the outstanding amount plus interest.
Useful tips
- Use professional services: Hire an accountant or tax advisor to properly calculate the tax and file the return.
- Keep all documents: Keep receipts for utility payments, repairs, and other expenses. This will help with deductions.
- Consider long-term rental: Long-term rental offers tax benefits and reduces the risk of vacancy.
- Review the rental contract: Ensure that your rental agreement complies with Spanish law and covers all important aspects.
Conclusion
Rental income in Spain can be profitable, but it requires compliance with tax regulations. Residents have more opportunities for deductions, while non-residents must account for fixed rates. Prepare in advance to avoid unpleasant surprises, and if necessary, seek professional help.
