Non-EU landlords in Spain can now claim deductions to cut 24% rental tax

Non-EU landlords in Spain can now push back on the 24% flat tax on gross rent, thanks to a July 2025 ruling that treats the no-deductions rule as illegal discrimination.

What the ruling changed

Spain's National High Court held on July 28, 2025 that denying rental expense deductions to non-EU non-resident landlords, while granting them to EU and EEA residents, breaches the EU's free movement of capital rules. The decision, appeal 636/2021, targets a long-standing split in the Non-Resident Income Tax (IRNR) filed on Modelo 210.

Before the ruling, EU and EEA landlords paid 19% on net rental income after expenses, while landlords resident in the UK, US, Canada, Australia and other third countries paid 24% on gross rent with nothing deductible. After the ruling, non-EU landlords can, in practice, claim the same categories of deductions: mortgage interest, IBI, community fees, repairs, insurance, utilities paid by the owner and management fees.

The math is blunt. A landlord collecting €12,000 in rent with €4,000 in expenses used to owe 24% on the full €12,000. The same landlord can now argue for 24% on €8,000, cutting the bill by nearly a thousand euros a year on that example alone.

The catch: still on paper, still 24%

The statute hasn't changed. The 24% rate and the no-deductions wording formally remain in force and the State Attorney is expected to appeal to the Supreme Court. Until that appeal lands or Congress rewrites the IRNR, the tax agency can and often will, reject deductions at the counter and force landlords to fight for them.

That means claims aren't automatic. Non-EU owners have to file on a net basis and be ready to challenge a refusal or lodge a solicitud de rectificación on past returns and wait it out. Some cases will end up in the economic-administrative courts before any refund arrives.

Who needs to act and when

The four-year statute of limitations is the clock that matters. Non-EU landlords who filed Modelo 210 for tax years 2021 onward can still request rectification and refunds on those returns before each year prescribes. Waiting for the Supreme Court means watching the oldest open year drop off the table.

For 2024 income onward, rental filings are annual, due Jan. 20 of the following year (Jan. 15 by direct debit). Owners in this position, especially those weighing longer-term plans covered in the Spain guide, should gather invoices for IBI, community fees, mortgage interest and repairs now and file current returns on a net basis rather than default to the old gross calculation.

The May 2026 Supreme Court decision striking down the national VUT short-term rental registry removes one parallel paperwork burden, but doesn't touch the IRNR fight.