What sort of taxes do I have to pay as a foreigner for renting out my house?

Spain is one of the favourite destinations for European citizens to invest their capital in real estate. The Costa Blanca North, the region where we´re active, is therefore a fantastic area in which to buy a second house. In addition, you might want to make your property profitable by letting it to tenants. And it doesn´t matter whether you let your house all year round or only during the months when you are not staying there yourself. In either case, this article explains the taxes you will have to pay in Spain for renting out your property as a foreigner.

Which sorts of taxes foreigners have to pay in Spain 

If you are a foreigner and you decide to let your house in Spain, you’re more than likely unsure about the sort of taxes you have to pay. The first thing you have to know is whether you are a resident for tax purposes in Spain.

Are you staying more than 183 days per year in Spain, are you working in Spain and do your spouse or children live in Spain? If your answer is yes to one of these questions, you are considered a resident for tax purposes in Spain. But dependent on your specific situation, which taxes do you have to pay? Let us clarify that for you!

What is IRPF and how does it work?

If, having answered ‘yes’ to the questions above you are considered a tax resident of Spain, you will have to pay IRPF (personal income tax). This tax is levied on income you generated in Spain, either from your professional activities or in this case, from renting out your property. 

What is IRNR and hoe does it work?

However, even if you are not a tax resident of Spain, you will have to pay IRNR (non-resident income tax), which means that as an EU-citizen, you have to pay 24% of your rental income in taxes. If you don´t come from an EU member state, this percentage is lower, namely 19%.

Please note that everyone who is considered a non-resident in Spain, even if they do not let their property, has to pay IRNR. In that case, you pay a maximum of 2% of the cadastral value of the real estate.

We hope that this information helps clarify any doubts you had concerning taxes applicable when renting out a house in Spain.