Taxation on Real Estate, Rentals, Sales
An overview of how real estate is taxed in Spain, depending on your residence status, across three situations: renting a property, owning a property, and selling a property.
Spain taxes real estate income based primarily on two factors:
- 1️⃣ Where the property is located, and
- 2️⃣ Where the taxpayer resides.
This determines whether the taxpayer is subject to Personal Income Tax (IRPF) or Non-Resident Income Tax (IRNR).
🧭 General Overview
In international taxation, real estate is always taxed where it is physically located. This principle is reflected in Spain’s domestic law and in most Double Taxation Treaties (DTAs) based on the OECD Model Convention.
| Taxpayer’s Residence | Location of Property | Spanish Tax | Key Points |
|---|---|---|---|
| Spanish resident | Abroad | IRPF (Personal Income Tax) | Must declare worldwide income, including foreign property. Deduction for taxes paid abroad may apply. |
| Non-resident | Spain | IRNR (Non-Resident Income Tax) | Spain always taxes income and gains from property within its territory, regardless of DTA existence. |
In short, Spain reserves the right to tax income and capital gains derived from real estate located within its borders, even if the taxpayer lives elsewhere.
💰 Rental Income
Rental income from real estate is one of the most common cross-border tax situations.
Spain differentiates between residents and non-residents, and each group follows its own rules.
🟢 Spanish Residents (IRPF)
Spanish residents are taxed on worldwide income, so they must declare rental income from both Spanish and foreign properties.
They calculate the rental yield as if the property were in Spain, regardless of how the foreign country determined its taxable base.
| Step | Explanation |
|---|---|
| 1. Determine gross rent | All income earned from leasing the property, converted to euros using the exchange rate of each payment day. |
| 2. Deduct necessary expenses | Includes loan interest, repairs, insurance, local taxes, management fees, depreciation, etc. |
| 3. Apply limitations | Maintenance + repair + interest can’t exceed gross income; the excess can be carried forward for 4 years. |
| 4. Double taxation deduction | Spanish tax law allows a credit for taxes paid abroad on the same income, if evidence is provided. |
🧩 Important note:
Some DTAs use an exemption with progression method instead of the credit method (e.g. Austria, Japan, Netherlands, China, Morocco, Poland). In these cases, the income is exempt in Spain but may affect the tax rate on other income.
✳️ Example – Spanish Resident Renting Abroad
Ms. Laura Martínez, Spanish resident, owns an apartment in Berlin.
| Gross annual rent | €18,000 |
| Expenses (loan interest, IBI, repairs) | €4,000 |
| Net income | €14,000 |
| Tax paid in Germany | €2,800 |
In Spain:
- Her IRPF includes €14,000 as rental income.
- Spanish tax due: ~€3,200
- Foreign tax credit: €2,800
- ✅ She pays only the difference (€400) in Spain.
This ensures no double taxation but guarantees that Spain still taxes the worldwide income.
🏡 Imputed Income (When Property is Not Rented)
Spain also taxes property owners who do not rent or use their property for business.
This “imputed income” reflects a notional rental value of the property.
| Taxpayer | Base for imputed income | Rate | Declaration |
|---|---|---|---|
| Resident (IRPF) | 1.1% of half of acquisition value (if no cadastral value) | Taxed at resident’s progressive rate | Declared annually |
| Non-resident (IRNR) | 2% of cadastral value (1.1% if updated in last 10 years) × days of ownership | 19% (EU/EEA) / 24% (others) | Form 210, income type 2, filed next year |
📅 Accrual date: December 31 each year
💳 Payment deadline: All year following, direct debit allowed until December 23.
🏚️ Sale (Transfer) of Real Estate
When a property is sold, Spain taxes the capital gain — the difference between the sale price and the acquisition cost (including purchase costs and improvements, less depreciation).
🟢 For Spanish Residents (IRPF)
| Concept | Explanation |
|---|---|
| Capital gain/loss | Sale price – (purchase cost + acquisition expenses + improvements – depreciation). |
| Foreign properties | Calculated the same way; exchange differences are done in original currency, then converted to euros. |
| Reinvestment exemption | Possible if reinvesting in another main residence (even abroad), provided it was the habitual home. |
| Double taxation | Deduction allowed for foreign taxes paid on the same gain. |
✳️ Example – Resident Selling Foreign Property
Ms. Beatriz Sánchez, Spanish resident, sells a Paris apartment.
| Sale price | €300,000 |
| Purchase cost (incl. taxes, notary) | €180,000 |
| Capital gain | €120,000 |
| Tax paid in France | €20,000 |
In Spain:
- Spanish tax on gain ≈ €27,000
- Deduction for French tax: €20,000
✅ Final Spanish payment: €7,000.
Tax Guide 2026
If you need an overall view of tax obligations, click on Taxes in Spain Guide 2026.
🧾 Summary Table: Main IRNR and IRPF Differences
| Category | Spanish Residents (IRPF) | Non-Residents (IRNR) |
|---|---|---|
| Tax base | Worldwide income | Only Spanish-source income |
| Rental deductions | Yes | Only EU/EEA residents |
| Rates | Progressive (19–47%) | Flat: 19% (EU/EEA), 24% (others) |
| Imputed income | Yes | Yes (19%/24%) |
| Capital gains | Taxed at 19–28% | 19% flat |
| Reinvestment exemption | Yes | Yes, for EU/EEA residents |
| Forms used | 100 (annual IRPF) | 210, 211, 216, 296 |
