Spain Extends Rental Tax Deductions to Non-EU Property Owners

National Court Ruling Now Allows Non-EU Non-Residents in Spain to Deduct Expenses from Rental Income

In a landmark ruling announced July 28, 2025, Spain’s National Court (Audiencia Nacional) declared that non-resident property owners from outside the European Union and European Economic Area now have the same rights as EU/EEA residents to deduct expenses against rental income when calculating Non-Resident Income Tax (IRNR). This decision aligns Spanish tax policy with European jurisprudence and could have broad implications for international property investors.

Previously, non-resident owners from third countries (such as the United States) were denied the ability to deduct costs related to their Spanish rental properties—unlike EU/EEA residents. The Court found this exclusion violated the principle of free movement of capital within Article 63 of the EU Treaty, as well as non-discrimination clauses in select international agreements. The judgment follows case law from the European Court of Justice, which has extended these protections to citizens of non-EU countries.

As a result, Spanish tax authorities must allow non-EU non-residents to deduct relevant expenses, such as maintenance and management costs, just like their European counterparts. The ruling not only impacts property rental income but sets precedent for other areas of Spanish tax law where international investors face different treatment.

“This is great news for our current owners and also for future investors in Spanish property, especially in Barcelona. Extending these deductions helps make property ownership more accessible and fair, increasing the appeal of the Spanish market for buyers worldwide.”
Katya Moshnikova, Senior Real Estate Consultant at Urbane International Real Estate

While the ruling may be appealed, international property owners are encouraged to review their filings and seek professional advice about potential rebates and deductions going forward.