Let's consider an example for a non-resident EU citizen who owns a property in Spain and rents it out for the entire year of 2025. We'll assume the property owner is eligible for deductions.
Annual rental income: 1000 EUR × 12 months = 12,000 EUR
Deductible expenses (example):
- Property tax (IBI): 500 EUR
- Community fees: 600 EUR
- Home insurance: 300 EUR
- Maintenance and repairs: 400 EUR
- Mortgage interest: 1,500 EUR
- Depreciation (3% of property value, excluding land): 1,800 EUR
Total deductible expenses: 5,100 EUR
Net rental income: 12,000 EUR - 5,100 EUR = 6,900 EUR
For EU residents, a 50% reduction applies to net rental income for agreements formalized from January 1, 2024:
6,900 EUR × 50% = 3,450 EUR
Taxable income: 6,900 EUR - 3,450 EUR = 3,450 EUR
Tax rate for EU residents: 19%
Tax due: 3,450 EUR × 19% = 655.50 EUR
In this example, the property owner would owe 655.50 EUR in taxes on their rental income for the year 2025. This amount would be declared and paid between January 1 and January 20, 2026, as per the new annual reporting requirement for rental income starting in 2024.
It's important to note that non-EU residents face a higher tax rate of 24% and are not eligible for expense deductions. Additionally, specific circumstances and regional variations may affect the final tax calculation, so consulting with a Spanish tax professional is advisable for accurate tax planning.
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