Spain is one of the top destinations for European citizens to invest their capital in real estate. In fact, the Costa Blanca, where VAPF developments are found, is an excellent area to acquire a second home. Moreover, you even want to make profit off of this property and rent it out. Whether it’s for the whole year or during the months when you’re no there. Whatever your situation, in this article, you’ll learn about the tax you must pay in Spain to rent out your property as a non-national in Spain.

In addition, if you finally decide to buy your property with VAPF and want to rent it, you might be interested in finding out about some of the exclusive services we offer to our clients. One of those services being that we manage your apartment for rent for the months you’re not using it. You don’t have to worry about anything! Choosing VAPF means choosing peace of mind.

What tax should foreigners pay in Spain?

Once you are familiar with our rental management service, we would also like to give you advice on rental taxation issues. If you are a foreigner and you decide to rent your property in Spain, it is very likely that you will have questions about the tax you will have to pay. Well, the first thing you should know is whether you are a resident for tax purposes in Spain.

Do you live in Spain for more than 183 days a year? Do you work in Spain? Do your spouse or children live in Spain? If you answered yes to any of these three questions, then you should know that you’re a resident for tax purposes in Spain. Now then, as for your particular situation, what tax should you pay? We’ll answer your questions!

What is IRPF and how does it work?

If, after answering the previous, you’re considered a resident for tax purposes in Spain, IRPF (resident personal income tax) is the tax you must pay. This tax is levied on income generated in Spain, either from your professional activity or, in this case, from renting a property.

What is IRNR and how does it work?

On the other hand, if you are not considered to be a resident for tax purposes in Spain, IRNR (non-resident income tax) is the tax you should pay for renting out a property. To be more specific, EU citizens have to pay 24% on their income. If your country of residence is not part of the EU, this percentage is reduced to 19%.

However, remember that those who are considered non-residents for tax purposes in Spain, even if they do not rent out their property, will also have to pay IRNR. In this case, you will pay a maximum of 2% of the property’s cadastral value.

We hope we’ve answered all your questions about tax and renting out a property in Spain. Once again, if you buy with VAPF, you won’t have to worry about any of this. Our team of experts will advise you on fiscal matters both throughout the purchasing process and the rental one too. You can also follow our blog where we have more information on tax issues in Spain.