Taxes and Fiscal Obligations When Renting Out Your Flat in Spain

Do I have to pay taxes if I rent out my flat?

Yes.
But don’t panic—renting is still profitable even after declaring your rental income.
The key is to do things properly from the start to avoid surprises or fines later on.

What taxes do I need to pay as a property owner?

1. IRPF – Personal Income Tax (for Spanish tax residents)

If you’re a tax resident in Spain and rent out your flat, the rental income is considered real estate capital income.
It’s declared in your annual tax return.

Good news:
If the rental is for long-term residential use, you can apply a 60% reduction on the net income.
Meaning, you only pay taxes on the remaining 40%.

2. VAT – Only in specific cases

In general, long-term residential rentals are exempt from VAT.
However, if you rent to a business, or offer short-term rentals with services (cleaning, reception, etc.), VAT may apply.

This is why professional advice is essential—especially for tourist rentals.

3. Withholding Tax – If renting to a company

If your tenant is a company, they must withhold a percentage of the rent (currently 19%) and pay it directly to the tax authorities on your behalf.
This will later appear in your annual tax return.

What expenses can you deduct?

Here’s the good part:
You can deduct a number of expenses related to the rental, such as:

• Mortgage interest (if still paying)

• Property tax (IBI) and municipal fees

• Home insurance

• Repairs and maintenance

• Community fees

• Utilities (if paid by you)

• Agency or accountant fees

• Annual property depreciation

All of these reduce your taxable income, which means you pay less in taxes.

What if I’m not a resident in Spain?

If you live abroad but own a rental property in Spain:

• You must submit Form 210 quarterly

• You’ll pay a flat 19% tax on income (for EU residents)

Even so, renting can still be highly profitable, especially in high-demand areas—as long as the property is well managed.

Do I need an accountant, or can I handle this myself?

It depends.
If you’re renting out one property and have basic tax knowledge, you might be able to manage it on your own.

But if you want peace of mind and to make the most of deductions, working with an accountant—or an agency like ours—can make your life much easier.

Want to rent without tax-related stress?

We’ll help you understand what you actually have to pay, how to legally reduce your tax bill, and how to keep it all simple and stress-free.