Holiday rentals of properties in Spain have become quite common among non-resident owners, particularly during the summer months. Many owners take advantage of this period to generate additional income whilst they are not using the property.
However, what not everyone realises is that this income is subject to specific tax obligations in Spain, even when the owner does not reside in the country.
Understanding how taxation works is essential to avoid penalties and ensure the property is managed correctly.
In this article, MAM Solicitors clearly explains what taxes you must pay if you rent out your property in Spain as a non-resident, how to declare them correctly, and what legal aspects you need to bear in mind.
Holiday rentals in Spain: what the tax authorities consider
For tax purposes, a holiday rental is defined as any short-term let intended for tourist use, typically managed through platforms such as Airbnb, Booking or similar sites, or through direct lets to private individuals.
For the Spanish Tax Agency, income obtained from this type of rental constitutes taxable income, regardless of where the owner resides.
What taxes does a non-resident pay on rental income in Spain?
If you are a non-resident property owner in Spain and receive rental income from your property, you must pay tax via the Non-Resident Income Tax (IRNR).
- Non-Resident Income Tax (IRNR): this is the main tax affecting rental income.
- It applies to income earned within Spanish territory
- Non-resident owners must declare it
- The standard tax rate is 19% for EU/EEA residents and 24% for other countries (generally speaking)
- Deductible expenses (for EU/EEA residents only): Currently, residents of the European Union and certain countries within the European Economic Area may deduct certain expenses directly related to renting, such as:
- Service charges
- IBI (Property Tax)
- Home insurance
- Repairs and maintenance
- Management fees
These deductions can significantly reduce the taxable base on which the tax is calculated.
However, it is worth noting that in recent years there have been various court rulings and legal debates regarding the possibility of extending certain deductions to property owners residing outside the European Union. Although current legislation does not generally provide for this possibility, this is an evolving area that could undergo changes in the future.
When and how should rental income be declared?
Income earned from letting a property in Spain by non-resident owners is declared to the Tax Agency using Form 210.
Currently, rental income can be declared on an annual basis, with the return for the previous financial year being submitted during January of the following year.
Furthermore, the regulations allow several streams of income from the same property during the relevant period to be grouped together in a single return, which considerably simplifies the administrative process for many landlords.
Nevertheless, it is essential to keep all documentation relating to rental income and to comply strictly with the deadlines set by the Tax Agency, as any error or delay may result in surcharges, interest or penalties.
What are the most common mistakes made by non-resident property owners in Spain?
At MAM Solicitors, we frequently observe a number of recurring mistakes made by non-resident property owners who rent out their homes in Spain, many of which can be avoided with proper tax planning.
Among the most common are the failure to declare income from holiday rentals, as well as confusion between tax residence and physical residence in Spain, which leads to tax obligations being applied incorrectly.
It is also common to fail to apply the permitted deductions correctly where they apply, or to fail to submit Form 210 within the established deadlines.
Finally, there is a misconception that rental platforms such as Airbnb or similar services automatically declare the income on behalf of the owner, which is not always the case and can lead to significant tax problems if not properly verified.
Nor should we forget that, in addition to national tax obligations, many autonomous communities have specific requirements for holiday rentals, such as licences, registrations or additional declarations.
Therefore, as well as complying with the Tax Agency, it is important to ensure that the property complies with the applicable regional regulations in each case.
MAM Solicitors: are you familiar with our exclusive Sweet Home service for non-residents in Spain?
At MAM Solicitors, we have a department specialising in non-resident foreign property owners, known as our Sweet Home service, designed for those who own a property in Spain but do not live in the country.
We know that owning property from abroad involves several tax and administrative obligations towards the Spanish Tax Agency, which can be complex, subject to change and difficult to manage without professional support. That is why our aim is to act as your legal representative in Spain, facilitating compliance with all your obligations and ensuring your property is always in order.
Through the Sweet Home service, we offer comprehensive and ongoing support, including resolving queries regarding non-resident taxation, providing up-to-date information on regulatory changes that may affect you, as well as reminders and notifications of key tax deadlines to avoid delays or penalties.
The Sweet Home service is designed to give you peace of mind, security and confidence, so you don’t have to worry about paperwork, deadlines or regulatory changes, allowing you to enjoy your property in Spain with complete peace of mind.
If you’d like to find out more or have any questions, please contact us and our team will be at your disposal for whatever you need.
