Tax Obligations for Rental Income in Spain

If you own a property in Spain and generate rental income, it’s essential to understand your tax obligations to avoid penalties and ensure compliance. Whether you are a resident or non-resident, Spanish tax laws require you to declare your rental earnings. Here's what you need to know

Who Needs to Pay Tax on Rental Income?

1. Spanish Residents: If you live in Spain and rent out your property, your rental income is taxed as part of your personal income tax (IRPF).

2. Non-Residents: If you own property in Spain but reside abroad, you must file a Non-Resident Tax Return to declare rental earnings.

Tax Rates for Rental Income

For Spanish Residents:

Rental income is added to your total taxable income and taxed at progressive rates (ranging from 19% to 47%) depending on your income bracket.

Residents can deduct property expenses, such as maintenance, repairs, and mortgage interest, reducing the taxable amount.

For Non-Residents:

EU/EEA Residents: Taxed at 19% on net rental income (deductions for expenses are allowed).

Non-EU/EEA Residents: Taxed at 24% on gross rental income (no deductions permitted).

Deductible Expenses (For EU/EEA Residents and Residents Only)

f you are an EU/EEA resident or a Spanish resident, you can deduct certain expenses directly related to your rental property, such as:

Property maintenance and repairs

Utility bills (when paid by the owner)

Community fees

Insurance premiums

Mortgage interest (on properties purchased for rental purposes)

Non-EU/EEA residents are taxed on gross income, with no deductions allowed.

Additional Tax Obligations

In addition to declaring your rental income:

Tourist Tax (if applicable): Some regions charge a per-night tourist tax for short-term rentals.

IBI (Impuesto sobre Bienes Inmuebles): An annual property tax applicable to all property owners in Spain.

Wealth Tax (if applicable): For high-value properties, an additional tax may be required.

Common Mistakes to Avoid

Failing to Declare Rental Income: Spanish authorities actively monitor rental platforms like Airbnb and Booking.com, making non-compliance risky.

Ignoring Regional Regulations: Different areas in Spain have distinct rules for touristic rentals that may impact your tax obligations.

Missing Deadlines: Late filings may result in fines or interest charges.

How We Can Help

At KD Tax Expert, we specialize in assisting property owners with:

✅ Accurate rental income declarations
✅ Identifying applicable deductions to minimize tax liabilities
✅ Ensuring compliance with Spanish tax regulations

📩 Contact us today to get expert support with your rental income taxes and stay compliant with Spanish tax laws!