Taxes on Rental Income in Spain: What You Need to Know!
Do you rent out property and live in sunny Spain? That’s fantastic! But don’t forget—part of your rental income will go toward taxes. Let’s break it down so there are no surprises.
Income Tax (IRPF): What’s the Deal?
Rental income is included in your overall taxable income, and Spain uses a progressive tax scale. The more you earn, the higher the rate: starting at 19% and going up to a whopping 47% for top earners. But don’t panic just yet—there are ways to trim down that taxable amount!
Deductions: What Can You Claim?
As a Spanish resident, you can deduct certain expenses related to maintaining your rental property, such as:
• Utilities
• Insurance premiums
• Mortgage interest
• Depreciation
If you’re renting the property as a long-term residence (not short-term holiday lets), you may also qualify for a juicy bonus—a 50% reduction on your net income. This means you’ll only pay taxes on the remaining 50%!
What Happens If You Don’t Pay?
Thinking about dodging the taxman? In Spain, it’s a risky game. The system is highly automated, and trying to skip out could land you with hefty fines. Better safe than sorry!
Pro Tip from Seasoned Landlords: Consult a tax professional. They’ll help you file everything correctly, claim all eligible deductions, and maximize your income while staying on the right side of the law.
Want to ensure your taxes are sorted and your income is optimized? The team at Avenida Invest is here to help! Book a consultation, and we’ll tailor solutions to your unique situation.
