At Salvador Tax & Legal, we want to share some very important news for the British community living in Spain or owning a second home here.
Until now, non-EU taxpayers (which includes British citizens after Brexit) were not allowed to deduct expenses on the Non-Resident Income Tax (NRIT / IRNR in Spanish) when renting out their Spanish properties. This created a clear disadvantage compared to taxpayers from the European Union (EU) or the European Economic Area (EEA), who were able to deduct expenses such as repairs, insurance, mortgage interest, or community fees.
The National High Court in Spain, in a ruling dated 28 July 2025, has now changed the rules:
👉 British taxpayers are entitled to deduct expenses under the same conditions as EU/EEA residents.
This is a major step forward in terms of tax fairness and represents a significant financial saving for property owners renting out their homes in Spain.
What does this mean in practice?
- If you own a property in Spain that you rent out, you will be able to deduct expenses such as community fees, property tax (IBI), insurance, repairs, and other rental-related costs.
- The tax will no longer be calculated on gross income, but on the net profit after deducting expenses.
- This can significantly reduce your annual tax bill.
How does this affect British property owners in Spain?
Many of our British clients own homes along the Mediterranean coast that they rent out, either fully or partially. From now on, they will be able to apply this new interpretation and optimise their taxation.
At Salvador Tax & Legal, we are ready to review your case personally and ensure that you apply all the possible deductions correctly.
