Spain's Supreme Court to decide if UK landlords can deduct rental costs
Spain's top court will review whether non-EU owners, including British landlords, may subtract expenses from rental income, which could lower their tax bills.
Spain's Supreme Court will assess whether landlords who live outside the EU, such as those from the United Kingdom, should be permitted to deduct rental-related expenses when calculating their Spanish tax liability. At present, non-EU owners face a 24% Non-Resident Income Tax on total rent, without the ability to offset costs, unlike EU/EEA residents who enjoy a 19% rate and expense deductions. The case originated from a US property owner whose deduction request was rejected, prompting the National Court to rule in his favor on free-movement grounds.
The State Legal Service appealed, and the Supreme Court accepted the review in July 2026. Should the court rule for deductions, a typical UK landlord earning €12,000 and incurring €4,000 in expenses could cut their tax bill by €960. However, the outcome remains uncertain, and owners should consult Spanish tax advisers before expecting any refunds.
