Generating rental income from property in Spain can be an excellent investment, but it also comes with tax obligations that every non-resident owner should understand. The amount of tax you pay depends on where you are tax resident, whether your property is rented short or long term, and which expenses can be deducted.
This guide explains how rental income is taxed in Spain, what expenses are deductible, the latest legal changes affecting non-EU owners, and the compliance requirements for holiday rentals on the Costa del Sol.
Key takeaway: Non-resident property owners must declare rental income annually using Modelo 210. EU and EEA residents are generally taxed at 19% on their net rental income after allowable deductions, while non-EU owners are subject to different rules. Professional tax planning helps ensure you remain compliant while claiming every deduction available.
How Is Rental Income Taxed in Spain?
The tax you pay depends on your country of tax residence.
EU and EEA non-residents are generally taxed at 19% on their net rental profit after allowable expenses have been deducted.
Non-EU property owners are generally subject to a 24% tax rate. However, recent legal developments have significantly changed how deductible expenses are treated for many non-EU owners.
What Expenses Can You Deduct?
Allowable deductions may include:
- IBI (property tax)
- Waste collection charges
- Community fees
- Property insurance
- Mortgage interest
- Utility bills
- Cleaning costs
- Property management fees
- Repairs and maintenance
- Marketing and booking platform commissions
- Depreciation of the building
Where a property is only rented for part of the year, expenses are generally apportioned according to the number of rental days.
What Changed for Non-EU Property Owners?
A significant court ruling in 2025 changed the position for many non-EU landlords.
The Spanish National Court ruled that preventing non-EU owners from deducting legitimate rental expenses conflicts with European principles regarding the free movement of capital.
Although the standard tax rates remain unchanged and further legal developments may follow, many non-EU owners may now be entitled to claim deductible expenses and, in certain circumstances, recover overpaid tax from previous years.
Because this area continues to evolve, professional guidance is strongly recommended.
When Do You Declare Rental Income?
Since the 2024 tax year, non-resident rental income is generally declared annually using Modelo 210.
The typical process includes:
- Renting the property with the appropriate licence.
- Keeping invoices and supporting documentation for deductible expenses.
- Preparing and submitting the annual tax declaration.
- Paying any tax due.
Where a property is only rented for part of the year, rental income is declared for the rental period, while imputed income rules apply for the periods when the property is not rented.
What Licences Are Required for Holiday Rentals in Andalucía?
Paying tax is only one part of operating a compliant holiday rental.
Owners should also ensure they meet the applicable tourism regulations.
Depending on the property and municipality, this may include:
- Registration as a Vivienda con Fines Turísticos (VFT)
- Community approval where required
- Compliance with local municipal restrictions
- Registration with the relevant regional tourism authorities
Requirements can vary between municipalities and may change over time, making it important to verify the latest local regulations before advertising a property for short-term rental.
Is It Still Worth Renting Out Your Property?
For many owners, the answer is yes.
Well-located properties on the Costa del Sol continue to achieve attractive rental demand, with strong occupancy throughout much of the year.
Professional property management, dynamic pricing, effective marketing, and ongoing maintenance can all contribute to improving rental performance while ensuring the property remains compliant with current regulations.
Frequently Asked Questions
Do I Pay Tax in Spain and in My Home Country?
Generally, Spain taxes the rental income first because the property is located in Spain.
Your home country may also tax the income, although double taxation agreements often provide relief through tax credits or exemptions.
What If I Only Rent My Property for a Few Weeks Each Year?
The same principles apply regardless of how many weeks the property is rented.
Rental income is declared for the rental period, while imputed income applies during the periods when the property is available for your own use.
Is Long-Term Rental Taxed Differently?
For non-resident owners, the applicable tax rates remain broadly the same.
However, licensing requirements differ, as long-term residential rentals generally do not require a tourist licence.
Can Mojo Manage Both My Property and My Tax Returns?
Yes.
House of Mojo provides an integrated service through Mojo Rentals for property management and guest services, 360 Property Maintenance for ongoing care, and Mojo’s Finance Department for annual rental tax declarations and financial compliance.
Related Guides
- What Taxes Do Non-Resident Property Owners Pay in Spain?
- What Are the Taxes When You Sell Property in Spain?
- Finance Department