Non-EU Expats Can Now Deduct Expenses on Spanish Rental Income – Exactly Explains the New Ruling

Non-EU residents can deduct rental expenses in Spain thanks to a landmark ruling by the National High Court.

A Landmark Decision for All Non-EU/EEA Property Owners in Spain

Spain’s National High Court has delivered a major victory for expats worldwide. The Court ruled that non-EU residents — including those from the UK, U.S., Canada, Australia, and beyond — can deduct expenses when filing Non-Resident Income Tax (IRNR) on rental income from Spanish property.

This decision reshapes the landscape for thousands of landlords outside the EU/EEA who submit Form 210 every year. From now on, they may enjoy the same rights as EU residents when it comes to expense deductions.

The Case That Sparked the Change

The dispute began when a non-EU taxpayer in Barcelona filed supplementary tax returns for the years 2016–2018. She asked to deduct rental expenses in Spain in the same way EU residents are allowed.

However, Spain’s Tax Agency and the TEAC rejected her claim, insisting that Article 24 of the IRNR Law limited deductions to EU/EEA residents. The taxpayer appealed. Eventually, the National High Court intervened and sided with her, creating a turning point for international property owners.

What the National High Court Ruled

The judges concluded that excluding non-EU landlords from deductions:

Violates EU law on the free movement of capital (Article 63 TFEU)
Breaches non-discrimination clauses in international tax treaties
Contradicts rulings from the CJEU and Spanish Supreme Court

Therefore, the Court declared the restrictive interpretation unlawful. From this point forward, non-EU landlords can deduct legitimate expenses on their IRNR returns.

Who Is Affected?

This precedent applies to any non-EU/EEA resident with rental property in Spain. It directly benefits citizens of:

🇬🇧 United Kingdom

🇺🇸 United States

🇨🇦 Canada

🇦🇺 Australia

🇨🇭 Switzerland

🇲🇽 Mexico

🇧🇷 Brazil …and many more.

Consequently, if you filed Form 210 without deductions because of your residency status, you may now qualify for a refund.

What Expenses Can Be Deducted?

Non-EU/EEA landlords can deduct a range of expenses, provided they relate directly to the rental income. These include:

Maintenance and repair costs
Agency or management fees
Mortgage interest
Insurance premiums
Utility bills (if paid by the owner)
Community and cleaning expenses

In other words, almost all costs normally accepted for EU residents now apply to you as well.

Can I Claim a Refund for Past Years?

Yes. Since this ruling sets a legal precedent, non-EU landlords may recover overpaid taxes. If your case falls within the statute of limitations (usually 4 years), you can submit amended returns and request a refund.