Spain Rental Income Tax Non-Resident 2026: Worked Example

Non-Resident Income Tax (IRNR) splits foreign landlords into two groups and taxes them very differently.

EU and EEA residents (the 27 EU states plus Iceland, Liechtenstein and Norway) pay 19% on net rental income, after deducting expenses attributable to the rented period. The deduction list is generous: mortgage interest, IBI, community fees, insurance, repairs, agent fees, utilities paid by the owner, and a 3% annual depreciation on the construction value of the building.

Everyone else pays 24% on gross rental income, no deductions at all. That includes UK residents since 1 January 2021, US and Canadian citizens, Swiss residents, and almost every Latin American country. Ukrainian residents sit in this non-EU bracket. Russian residents sit in the same bracket. Israeli residents also pay the 24% gross rate.

The split sits in Article 24.6 of the Non-Resident Income Tax Law. Before Brexit, British owners sat in the EU bracket. Many paid almost nothing in 2020 because their mortgage interest and running costs wiped out the rent. In 2026 the same owner, with the same tenant and the same rent, often pays four-figure annual tax. If you are in that category, the practical implications are covered in our note on the 90/180 rule and British owners.

What does Modelo 210 look like after the 2024 reform?

The filing mechanics changed in a way most landlords have still not caught up with. From tax year 2024 onwards, Modelo 210 for rental income is filed annually, not quarterly. The deadline is 1 to 20 January of the year after the income was earned. Rent collected during 2026 is declared by 20 January 2027.

Imputed income on days the property sits empty is also annual, with a 31 December deadline for the prior tax year. A property that is let for part of the year and empty for the rest generates both filings, and both land on the same Modelo 210 form.

For a two-property landlord, annual filing cuts the paperwork from eight returns a year to two. The detailed step-by-step is in our Modelo 210 guide, and quarterly filers transitioning across tax years should check our Q3 2026 deadline note.

Worked example: a EUR 200,000 Torrevieja apartment

The property: a two-bedroom apartment in Torrevieja, bought for EUR 200,000 in 2023. Cadastral value EUR 80,000, of which EUR 48,000 is construction (the Catastro splits land and construction on every reference). Mortgage of EUR 120,000 at 4%, interest paid in 2026 roughly EUR 3,200.

The lease: a Spanish long-term tenant at EUR 1,000 per month, in place for 10 months of the year, vacant for two months during a tenant change.

Gross rental income: EUR 10,000

Full-year expenses:

Item	Annual EUR
IBI (municipal property tax)	350
Community fees	900
Home insurance	280
Mortgage interest	3,200
Depreciation (3% of EUR 48,000)	1,440
Agent management (10% of rent)	1,000
Repairs during tenancy	400
Total	7,570

Most costs run all year regardless of occupancy, so they are prorated 10/12 for the rented period. Agent fees and repairs tied to the tenancy are deducted in full. That gives:

• Prorated IBI, community, insurance, mortgage, depreciation: EUR 5,142
• Agent and repairs (full): EUR 1,400
• Total deductible expenses: EUR 6,542
• Net taxable income: EUR 3,458
• Tax at 19% (EU/EEA owner): EUR 657

For the two vacant months, the Hacienda imputes notional income at 1.1% of the cadastral value (if the cadastral value was reviewed in the last ten years) or 2% otherwise. Torrevieja was last revised in 2015, so it is still inside the 1.1% window in 2026.

• Imputed income: EUR 80,000 x 1.1% x 2/12 = EUR 147
• Imputed tax at 19%: EUR 28
• Total 2026 tax, EU/EEA owner: EUR 685

Now the same property, same tenant, non-EU owner:

• Gross rent: EUR 10,000
• No deductions permitted
• Tax at 24%: EUR 2,400
• Imputed income EUR 147 at 24%: EUR 35
• Total 2026 tax, non-EU owner: EUR 2,435

Item	EU/EEA owner (19%, net)	Non-EU owner (24%, gross)
Gross rent	EUR 10,000	EUR 10,000
Deductible expenses	EUR 6,542	EUR 0
Taxable base (rent)	EUR 3,458	EUR 10,000
Tax on rental income	EUR 657	EUR 2,400
Imputed income (2 months vacant)	EUR 28	EUR 35
Total IRNR 2026	EUR 685	EUR 2,435
Effective rate on gross rent	6.85%	24.35%

The EU owner keeps about EUR 1,750 more per year on identical cash flows. Over a ten-year hold, that compounds into EUR 17,500 of after-tax income, before any capital gain.

What does this do to the real yield at each budget?

Most yield calculators quote gross: annual rent divided by purchase price. Real after-tax, after-cost yield is usually 150 to 300 basis points lower, and the delta depends heavily on the tax regime.

Using Idealista's long-term rental index for Costa Blanca towns, the current gross rental yield on standard apartments sits between 4.5% and 6.5% depending on town and condition. See the full breakdown in long-term rental yields on the Costa Blanca. You can cross-check town-level rent per square metre on the Idealista rental price report before running your own numbers.

Applied to three budget tiers in the stocked Costa Blanca towns:

Scenario	Purchase	Gross rent	Gross yield	Net yield EU owner	Net yield non-EU owner
Torrevieja 1-bed apartment	EUR 90,000	EUR 6,600	7.3%	4.9%	3.4%
Torrevieja 2-bed apartment	EUR 200,000	EUR 10,000	5.0%	3.3%	2.0%
Orihuela Costa 3-bed villa	EUR 350,000	EUR 16,800	4.8%	3.1%	1.8%

The lower-ticket apartment produces a higher yield in every column, but also exposes the non-EU owner to the worst tax drag in relative terms. At EUR 200,000 and above, EU and non-EU investors are effectively looking at different asset classes.

To filter current stock, Torrevieja apartments in this band sit under Torrevieja sale listings, and the comparison between the two southern hotspots is set out in Torrevieja vs Orihuela Costa 2026 and the quieter alternative in Guardamar 2026.

Where does the tax number get worse than expected?

Four failure modes catch out non-resident landlords regularly.

Imputed income on vacant months is not optional. If your apartment sits empty for the three winter months, you owe IRNR on the imputed rent for those months even if it never generated a euro. On a EUR 100,000 cadastral value that is roughly EUR 275 of base at 1.1%, so EUR 52 of tax for an EU owner. Small, but if you ignore it for five years the Hacienda will backdate the lot with interest.

Agent-managed short lets trigger VAT and registration risk. A standard long let is VAT-exempt. A short let with hotel-like services (daily cleaning, breakfast) is not and must register for IVA. Separately, vacation rental licences are now frozen or restricted in most coastal towns. A property bought for Airbnb income that cannot get a licence drops to long-let yields overnight, and the tax calculation changes with it.

Depreciation requires a defendable construction value. The 3% depreciation is the single largest deduction for most landlords. The construction value comes from the cadastral split, which a reasonable tax representative will pull from the cadastral reference. If the split is adverse (low construction, high land), your deduction shrinks and your tax rises. Check this before you buy, not after.

Regional surcharges on empty housing may spread. Several autonomous communities have begun to apply surcharges under the 2023 Housing Law. Valencia and Murcia have not activated them as of late 2026, but Catalonia and the Balearics have. If the Generalitat Valenciana changes its stance, non-resident landlords who leave properties empty will pay more IBI as well as more IRNR.

How does a UK or US owner actually reduce the bill?

Few legal routes exist, but they matter.

Hold through a Spanish SL (sociedad limitada). A Spanish company pays corporate tax at 25% on net profit, with full deductions. For high-expense properties the effective rate often beats 24% on gross. Set-up and compliance cost EUR 2,500 to EUR 4,000 per year, so the breakeven is typically EUR 15,000 of annual rent or more.

Move the tax residence to Spain. A UK retiree who relocates to Spain and becomes tax-resident shifts from 24% gross IRNR to the progressive IRPF scale on worldwide income. Combined with the main-home exemption on their UK property sale and the Spanish standard deductions, this often reduces, not increases, total tax. Compare the routes in Spain residency 2026 visa paths and the specific tax regime in Beckham law 2026.

Accept the 24% and model it correctly. The simplest approach. Investors who buy expecting the EU tax treatment and then discover the actual 24% drag tend to sell at a loss. Investors who model 24% from the start, choose properties with lower running costs, and factor the drag into the acquisition price, do fine.

American owners have the US foreign tax credit to consider, covered in American buyers and Spain tax 2026. The 24% paid in Spain is usually creditable against US tax on the same income, so the total burden does not stack.

FAQ

Is the 19% EU rate still available to Norwegians?

Yes. Norway is in the EEA and Norwegian residents qualify for the 19% net-income regime. Same for Icelandic and Liechtenstein residents. Swiss residents do not qualify and pay the non-EU 24% rate.

Do I have to file Modelo 210 if the property made a loss?

EU/EEA owners who make a net loss after deductions file a zero or negative return and owe no tax. Losses do not carry forward against future rental income under the IRNR regime. Non-EU owners cannot make a loss on paper because no deductions apply, so they always file a positive return when the property is let.

Can I deduct the IBI I paid in 2026 for a property let in 2025?

No. The IBI accrues on 1 January of each year and is deductible in the tax year it falls due, prorated to the rented portion. You cannot shift it between tax years. The IBI 2026 explainer covers the accrual date and billing cycle by town.

What happens if the tenant pays late or defaults?

For IRNR, income is recognised when it is legally owed, not when it is collected. Unpaid rent that is six months overdue at year-end can be deducted as a bad debt, but only with proper documentation (burofax, court filing). Most small landlords never meet the paperwork bar.

Next steps

Run the numbers on a specific property before you make an offer. Our property tax calculator handles both IRNR scenarios and the imputed income on vacant months. If Torrevieja apartments are your first serious budget tier, the current live stock sits under Torrevieja listings.