The European Commission has recently issued a formal warning to Spain regarding the way it taxes properties owned by non-resident foreigners. According to Brussels, Spanish legislation could be considered discriminatory, as it does not treat non-residents in the same way as Spanish citizens with regard to their primary residence.
This announcement has raised concerns among foreign property owners, but it is important to clarify that this does not mean that all non-resident homeowners will automatically be exempt from tax. The situation is under review, but there are specific legal conditions that define what can be considered a “main residence” in Spain for tax purposes.
Current situation
In Spain, individuals who are not tax residents (that is, who spend less than 183 days per year in the country and whose main economic interests are abroad) must pay Non-Resident Income Tax (IRNR) on the imputed income of their Spanish properties. This applies whether the property is empty or used privately by the owner.
The issue raised by the European Commission relates to equal treatment between residents and non-residents. Spanish residents are exempt from taxation on their main home, while non-residents must pay IRNR on any property they own in Spain — even if it is the only one they have.
Clarifying the “main residence” concept
For tax purposes, a main residence (vivienda habitual) is one where the taxpayer actually resides for more than 183 days a year.
Therefore, non-residents who only spend short periods of time in Spain (for example, one or two months per year) cannot consider their Spanish property as their main residence, and the IRNR still applies.
There is one specific exception: the so-called “expatriate regime” (Régimen especial para trabajadores desplazados a territorio español), regulated under Article 93 of the Personal Income Tax Law (Ley 35/2006).
This regime applies to individuals who move temporarily to Spain for work reasons — such as professional athletes, executives, or expatriate employees.
These taxpayers may choose to be taxed under a special system, but this does not exempt them from IRNR simply for owning a property; rather, it changes how their income is taxed while they are working in Spain.
What does this mean for foreign property owners?
- The European Commission’s notice does not change the current law nor eliminate the IRNR obligation.
- Owning a property in Spain and visiting it occasionally does not make it a main residence. To qualify as such, you must live there more than 183 days a year — which would, in fact, make you a tax resident in Spain.
- The possible legal changes being discussed would aim to ensure equal treatment for residents and non-residents, but it is not a blanket exemption from tax obligations.
What are the next steps?
If Spain does not make the expected adjustments, the European Commission could initiate legal proceedings before the Court of Justice of the EU.
However, the main objective is to ensure that the regulations are fair and do not represent an obstacle to the free movement of people and capital, as established in the Treaty on the Functioning of the European Union and the Agreement on the European Economic Area.
In short, if you are a foreigner and own a property in Spain, there is no cause for alarm. The situation is being assessed, and it is likely that a more balanced tax framework will be established in the near future.
In the meantime, property owners can maintain their investments with the assurance that the European and Spanish authorities are working to ensure fair and equitable treatment.
