Investing in rental property in Spain has long been an attractive opportunity, but for many years, non-EU residents have faced a heavier tax burden than EU and EEA citizens. This may no longer be the case; thanks to recent legal changes, there may be significant tax refunds for previously undeducted leasing expenses, as well as a fairer system for non-EU taxpayers. However, the ruling is not final and may take two to three years to stabilise. 

Spain’s rental tax recovery for non-EU property owners: What changed?

Under Spain’s Non Resident Income Tax (NRIT) rules, non-EU residents renting out property in Spain paid 24% tax on gross rental income, with no deductions allowed. Meanwhile, EU/EEA residents paid 19% on net income after expenses were deducted. These rules placed non‑EU property owners at a disadvantage, making their rental investments less profitable and more costly. 

In July 2025, Spain’s National Court issued a landmark ruling (Case 3630/2025) in favour of a US tax resident, allowing deductions of legitimate rental expenses when calculating taxable rental income in Spain. If confirmed by the Supreme Court, this ruling could reduce the tax burden for non-EU property owners renting real estate in Spain. It could also open the door to reclaiming overpaid taxes for years still within the statute of limitations (up to four years) and including late payment interest in refund claims. While the issue of the applicable tax rate (19% versus 24%) is still pending, no ruling has yet granted non-EU residents the lower rate, only deductions. However, experts recommend preventive appeals as Spanish courts often restrict retroactive tax claims unless challenged promptly.  

Non-EU individuals who own rental property in Spain may benefit from this relief, whether the property is held either directly, through a foreign trust or via a nonresident company.  

Next Steps

For non-EU residents with rental property in Spain, these rulings provide a significant chance to deduct expenses and reclaim excess taxes paid on your rental income. Moreover, now is the ideal time to consider filing preventive challenges and preparing claims early to safeguard your rights, maximise potential refunds, avoid losing out due to the statute of limitations and ensure equitable treatment under Spanish tax regulations.  

At Bolder Group, part of our mission is to keep our clients informed, so we consistently monitor international developments and relevant regulatory changes to take proactive measures. Our team of experts is uniquely positioned to guide you through complex processes with our multi-jurisdictional expertise and tailored solutions.  

With the right legal strategy and expert support, you can protect your investments. If you have any questions about the update above, please get in touch with our Spanish team.  

Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.

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