Tax Information
Rent Taxes in Spain
A comprehensive guide on taxation for rental yields, covering residents, non-residents, and deductions.
Types of Rentals in Spain
The tax implications change depending on the type of rental contract you establish:
Long-Term Rental (Primary Residence)
Designed for tenants who will use the property as their permanent home. Qualifies for the 50%-90% resident deductions. Exempt from VAT.
Mid-Term / Seasonal (Temporada)
For tenants needing housing for a specific reason (students, temporary workers) usually under 11 months. Does NOT qualify for the resident deduction. Exempt from VAT.
Vacation / Tourist Rental
Short-term holiday lets. Does NOT qualify for the resident deduction. Subject to VAT if hotel-like services are provided.
Taxes for Residents in Spain
For tax residents in Spain, rental income is considered a return on real estate capital. It must be included in the annual Personal Income Tax (IRPF) declaration. Expenses related to the property (such as IBI, community fees, insurance, and maintenance) are deductible.
Taxes for Non-Residents
Non-residents must declare rental income under the Non-Resident Income Tax (IRNR). For residents of the EU, Iceland, and Norway, the tax rate is 19%, and expenses are deductible. For residents outside these territories, the rate is 24%, and no expenses can be deducted.
Bonifications and Reductions
If the property is rented as a primary residence (long-term rental), landlords who are tax residents in Spain can benefit from significant reductions. The standard deduction is 60% on the net yield for leases signed prior to May 2023 (or 50% under the new Housing Law, with possible increases up to 90% in tensioned areas).
Calculation Example (Resident)
Here is an example for a property purchased for €130,000 and rented for €1,000/month. The IRPF tax rate is 19% for the first income bracket (up to €12,450). We apply a 60% deduction on the net yield.
- Annual Gross Rent (€1,000/mo)
- €12,000
- Deductible Expenses (IBI, insurance, community, etc.)
- - €1,000
- Net Yield Before Deduction
- €11,000
- 60% Long-Term Rental Deduction
- - €6,600
- Taxable Base
- €4,400
- Taxes to Pay (19%)
- €836
- Final Net Profit (After Tax & Expenses)
- €10,164 / year
Calculation Example (Non-Resident)
Using the same numbers (Property: €130k, Rent: €12k/year, Expenses: €1k/year). Note that non-EU residents cannot deduct expenses and pay a higher flat rate.
- Annual Gross Rent
- €12,000
- EU Resident Tax Base (After €1,000 expenses)
- €11,000
- EU Resident Taxes (19%)
- €2,090
- EU Final Net Profit
- €8,910 / year
- Non-EU Tax Base (No deductions allowed)
- €12,000
- Non-EU Taxes (24%)
- €2,880
- Non-EU Final Net Profit (After real expenses)
- €8,120 / year
How Spain Compares in Europe
Spain offers highly competitive tax rates for non-resident investors, especially those residing within the EU/EEA, when compared to other popular European real estate markets.
* France: Non-residents are subject to additional social charges (Prélèvements sociaux). This is 7.5% for EU/EEA residents and 17.2% for Non-EU residents.
** Italy: The 21% rate requires actively opting into a special flat-tax regime ('Cedolare Secca') instead of paying higher progressive rates.
*** Germany: Non-residents pay a 5.5% 'Solidarity Surcharge' calculated on their income tax amount (effectively +0.77% on the base 14% rate).
Get in touch
Ready to grow your capital in Valencia?
Fill in the form or contact us directly. We will prepare an initial proposal within 24–48 hours based on your situation.