Non-EU Non-Residents Can Deduct Rental Expenses in Spain—but the Law Still Needs to Change

Great news for non-EU property owners in Spain: the National Court (Audiencia Nacional), in its ruling No. 3630/2025, has recognized the right of extracomunitario non-residents to deduct rental-related expenses under the Non-Resident Income Tax (IRNR)—just like EU/EEA residents. This change addresses a long-standing disparity in tax treatment.

What the Ruling Means

Previously, the tax authorities (Agencia Tributaria) and the national tax board (TEAC) denied deductions for non-EU individuals, claiming IRNR law only allowed such deductions for EU/EEA residents tied to information exchange agreements. The National Court rejected this discriminatory interpretation, citing EU principles of equal treatment, free movement of capital, and conventions against double taxation. 

Under this judgement, affected non-residents can:

• Request a correction of previous tax filings (Modelo 210).
• Seek refunds if rental income was taxed without including deductible expenses.

But the Law Hasn’t Changed—Caution Required

Important catch: this court decision doesn’t change the law itself yet. As a result:

• The Agencia Tributaria may reject refund claims, arguing current legislation doesn’t support these deductions.
• You may need to appeal through higher courts, potentially all the way to the Supreme Court.
• The tax authority has the option to appeal this ruling, which could change everything again depending on the outcome.

What Affected Non-Residents Should Do

1. Review Your Rental Filings: Identify past years where you were taxed on gross rental income without deducting expenses.
2. Submit Formal Refund Requests using Modelo 210 adjustments.
3. Prepare for Potential Appeals: Have documentation ready and understand the legal process if your request is denied.
4. Consult Legal Experts: Working with a trusted adviser can make a major difference.

How Taxadora Can Support You

At Taxadora, we help non-EU rental property owners navigate this evolving landscape:

• Audit Review: We assess past filings to identify non-deducted expenses.
• Claim Filing: We draft and submit correction requests to maximize refunds.
• Legal Strategy: We can guide you through appeals if needed.
• Compliance Assurance: We keep you updated as the law or judgments evolve.

Our recommendation is to start by checking which periods you have received rental income and had a high tax bill. Then have a look at your possible deductible expenses to see if these can adjust your tax bill significantly. If you can detect a tax saving we can help you reclaim the taxes you paid.

If you had some periods with very low rental income or no deductible expenses (or haven’t saved the invoices), a reclaim might not be worth the hassle. 

Final Thoughts

This ruling is a promising shift towards equal tax treatment—but it’s not final yet. If you’ve been impacted, now is the time to act—while the window is open. For tailored help handling these complexities, visit our blog or reach out to the Taxadora team today.