The Spanish National High Court has issued a groundbreaking decision that reshapes the taxation of rental income for non-EU non-residents in Spain. Until now, these taxpayers faced clear discrimination compared to EU residents, being taxed on their gross rental income at a higher rate without the ability to deduct necessary expenses. The Court has now recognized that this unequal treatment violates EU principles of free movement of capital and international agreements, confirming that non-EU property owners in Spain are entitled to deduct expenses such as mortgage interest, property tax (IBI), repairs, insurance, community fees, and depreciation. This ruling represents a major step towards fairness in the Spanish tax system and creates significant opportunities for savings and even refund claims for foreign investors with property in Spain.
At Manuel Jódar Asesores, we assist non-EU clients in calculating potential refunds and filing rectification claims to benefit from this ruling.
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