A recent landmark ruling by the Spanish National Court has brought fantastic news for non-European property owners in Spain. For years, citizens living outside the European Union were prohibited from deducting necessary rental expenses—such as cleaning, utilities, insurance, and maintenance—from their rental income, while EU residents enjoyed this benefit.

Now, the Court has declared this limitation unlawful and discriminatory, aligning non-EU property owners with their European counterparts when it comes to tax deductions.

What Changed?

Previously:

  • EU Residents: Could deduct rental expenses, reducing their taxable income.
  • Non-EU Residents: Had to declare the full rental income without any deductions.

This new ruling overturns that policy, citing Article 63 of the Treaty on the Functioning of the European Union, which guarantees the free movement of capital. The Court made it clear: tax treatment cannot differ based on nationality or residence.

Why This Matters

For non-EU property owners renting out their Spanish homes, this means:

  • You can now deduct necessary expenses such as:
    • Property management fees
    • Marketing costs
    • Cleaning services
    • Utility bills (water, electricity)
    • Insurance and maintenance
  • You can potentially claim refunds for previous years where deductions were not allowed.

⚠️ Note: The tax rates remain unchanged for now:

  • Non-EU owners: 24%
  • EU owners: 19%

The Bigger Picture

This ruling doesn’t just impact rental income. It sets an important legal precedent against discriminatory taxation in Spain. In fact, it could also affect future tax proposals—such as the recent idea of a “100% complementary tax” on property purchases by non-EU residents—since such measures would likely be struck down as discriminatory.

What Should You Do Next?

If you are a non-EU resident who owns property in Spain:

  1. Start deducting your expenses on future rental income declarations.
  2. Check if you can claim past deductions—you might be eligible for refunds.
  3. Seek professional advice to ensure compliance and maximize your tax benefits.

At Home Care, we work with trusted legal and tax experts who can guide you through the process. Want to know more?
👉 Contact Us Today

Key Takeaway

This decision is a major step toward fairness and legal certainty for non-EU investors. Spain must respect equality of treatment—and now, so can you.

✅ Ready to learn how much you can save? Contact us today to review your rental income strategy