Your guide to taxes on rental premises in Spain

Like rental properties, rental premises in Spain are subject to taxes. As a result, your net earnings from letting premises form part of your annual income and must be declared in your tax returns. In addition and unlike rental properties, premises have the added complication of IVA (VAT) and retentions. To find out more, read on to discover the main aspects of taxes on rental premises in Spain.

Last updated: March 2026

What are rental premises?

Premises are property used by someone for a business activity, such as a shop or office. No one lives in the premises.

What are my tax obligations as a landlord of rental premises?

You must do the following:

• Sign up as a landlord with the tax authorities. This is because you are providing a service and are therefore liable for IVA. You sign up via form 036 or 037 depending on whether you have any other business activities.
• Issue monthly invoices that include IVA.
• File quarterly IVA returns (Modelo 303).
• Include all rental income in your annual tax returns.

What about IVA on rental premises?

IVA is a complicated subject and it’s always best to take professional advice to avoid expensive mistakes. If you’re renting out premises, this is what you should bear in mind:

• Rental premises in Spain are subject to IVA at a flat rate of 21%. So, if the rental rate is €1,000 a month, you must charge the tenant 21% in IVA (VAT) on top (€210 in this case).
• You must present your tenant with monthly invoices that include IVA.
• Your tenant must pay you the amount corresponding to IVA at the same time as the rent.

Looking for professional help with taxes in Spain? Here it is!

What about tax on income from rental premises in Spain?

Under Spanish law, the tenant of the premises deducts 19% from the rental rate and pays it to the authorities as tax on your income from the rent. So, for example, if the monthly rental rate is €1,000, the tenant will deduct €190 and pay this to the tax authorities leaving you with a net €810.

This monthly deduction goes towards the tax you are due to pay on your income from the rental premises.

Am I entitled to deductions for IVA?

Yes, when you file your quarterly returns for IVA, you may compensate the amount paid for the rental with IVA you have paid on expenses such as utilities and repairs.

What about deductions for income tax?

Money you receive from letting premises are deemed to be part of your tax income, but first, you deduct eligible expenses. These include:

• Interest on loans for the purchase or refurbishment of the premises.
• Costs of maintenance and repairing the premises.
• Costs associated with the purchase of the premises such as transfer tax and legal fees.
• Council tax.
• Community fees and utilities if you pay them, not the tenant.

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Are there any deductions for long-term rental of premises?

No, the Spanish tax regime does not offer any further deductons.

Can I claim for expenses if the premises are empty?

Yes, you can as long as no valid contract is in place.

How much is tax on income from rental premises?

The same rates for income from employment apply and depend on your residence status:

Residents in Spain – 19% to 47%.

EEA non-residents in Spain – a flat rate of 19%.

Non-EEA non-residents in Spain – a flat rate of 24%.

Where can I get help with taxes in Spain?

Our expert team offers assistance with all tax matters in Spain for residents and non-residents. Get in touch to find out how they can help you avoid expensive mistakes and stay on the right side of the taxman.

Non-Resident Rental Tax Obligations in Spain (2026)

If you are a non-resident landlord in Spain, you face specific tax obligations that differ significantly from resident taxpayers:

• Tax rate: 19% for all non-residents
• EU/EEA advantage: You can deduct allowable expenses (mortgage interest, repairs, insurance, community fees, IBI) before calculating the 19% rate
• Non-EU residents: Tax is calculated on gross income — no deductions allowed
• Filing: Modelo 210 for rental income is filed annually — 1–20 January for 2024 and 2025 income, and 1–20 April of the following year from the 2026 tax year onwards under Orden HAC/623/2026
• Empty property tax: Even when not rented, non-residents must declare imputed income (1.1% or 2% of catastral value) annually

Deductible Expenses for Resident Landlords in 2026

Spanish tax residents can deduct a wide range of expenses from rental income before paying IRPF:

1. Mortgage interest — proportional to the rental period
2. Repairs and maintenance — but NOT improvements (these are depreciated over time)
3. Property depreciation — 3% of the higher of acquisition cost or catastral value of the building (excluding land)
4. Insurance premiums — home, liability, and rent guarantee insurance
5. Community fees (gastos de comunidad)
6. IBI (council tax) and tasa de basuras (waste collection fee)
7. Professional fees — lawyers, accountants, property managers
8. Utility bills — if paid by the landlord

Additionally, residents benefit from a 60% reduction on net rental income for long-term residential lets (contracts of at least one year), making the effective tax rate significantly lower than the headline IRPF rate.

Holiday Rental Tax Rules in Spain (2026)

If you rent your Spanish property as a holiday let or tourist rental, additional rules apply:

• Tourist licence required in most autonomous communities (Andalucia, Valencia, Catalonia, Balearic Islands)
• VAT (IVA) at 10% applies if you provide hotel-like services (cleaning between guests, reception, meals)
• No 60% reduction — the IRPF reduction for long-term lets does NOT apply to tourist rentals
• Platform reporting: Airbnb, Booking.com etc. report your income to Spanish tax authorities via Modelo 179
• Local regulations: Many municipalities restrict tourist rentals — check local rules before listing your property

Reviewed by María Luisa de Castro, CEO at CostaLuz Lawyers — Updated 2026

This is general information, not definitive legal advice — every case requires individual analysis.