Keeping or renting out a home-country property from Spain

Key rules

• Worldwide income: As a Spanish tax resident, you declare rent from your home-country property in your Spanish return.
• Foreign assets: Report foreign assets when any one category exceeds €50,000 on 31 December.
• Double tax: Tax paid abroad on the rent is credited in Spain, up to the Spanish tax on that income.
• Insurance: Tell your insurer you have moved or let the property, or cover may be reduced.

What keeping a property creates

Keeping a property back home creates four sets of duties: tax in your home country, a Spanish IRPF declaration, Spanish reporting of foreign assets, and insurance. Each is covered below. The decision block compares renting out, leaving empty and selling.

Spanish income tax on the rent

Once you are tax resident in Spain, you pay Spanish tax on your worldwide income. Rent from your home property goes in your IRPF return as property rental income.

• Convert each rent payment and expense to euros at the exchange rate on its date.
• Deduct only costs tied to the rental: interest, local property taxes, insurance, repairs and depreciation. Depreciation is 3% of the higher of the purchase cost or the cadastral value, excluding the land.
• A long-term residential let can qualify for a 50% reduction on net income. For leases signed before 2024 the reduction was 60%.
• File between April and June, using the tax agency's online Renta Web service.

Tax in your home country

Your home country usually taxes the rent too, because the property is there. Spain and the UK, and Spain and the US, have treaties that give the property's country the right to tax it.

• UK landlords: If you live abroad for more than six months a year, you fall under the Non-resident Landlord Scheme. Apply to HMRC to receive rent gross. If you don't, your letting agent or tenant withholds basic-rate tax. Report the profit on a Self Assessment return.
• US citizens and green card holders: You report worldwide rent every year on Form 1040 Schedule E, with depreciation. You claim the foreign tax credit on Form 1116.

Avoiding double tax

Spain gives you a credit for tax paid abroad on the same income. The credit is the lower of two amounts: the foreign tax you actually paid, or the Spanish tax on that income. Work it out separately for each source of income. Any unused excess can be carried forward for four years. Keep the foreign tax assessment or certificate and the payment receipts in case the tax agency asks. The credit does not cover tax that the treaty says should not have been charged.

Reporting the property to Spain

Spanish residents must report foreign assets on Modelo 720 when any one category exceeds €50,000 on 31 December. The categories are bank accounts, investments and real estate. A property is real estate, so it counts. The same applies to a rent account abroad.

• File between 1 January and 31 March of the following year.
• After your first filing, you only file again if a category rises by more than €20,000.
• Penalties were reduced in 2023, but the duty to file remains.

If you sell

Spain taxes the gain if you are resident here. The gain is the sale price less the purchase cost and costs, converted to euros at the rate on each date. It goes in the savings income base at progressive rates from 19% to 30%. The country where the property sits usually taxes the gain too, and Spain credits that tax. Spain gives no inflation relief. The reinvestment exemption applies only to a main home.

Insurance

Tell your insurer you are moving abroad or letting the property. A let property usually needs a landlord policy, not a standard home policy. UK and US insurers often cut cover once a home has been empty for 30 or 60 days, and water damage, theft and vandalism are the cover most often reduced or removed. Specialist unoccupied-property cover exists. Ask your insurer for the exact empty-period limit before you leave.

Where to go next

The checklist below lists the steps for a rented property. The sections above explain why. For notice periods and the timing of your move, see the process block on deciding what to do with your home.

Choosing between options

Should you sell your home-country property or keep it while living in Spain?

• Keep it and rent it out: You want ongoing income and can handle home-country tax, your Spanish return, Spanish asset reporting and landlord insurance.

• Keep it empty: You plan to return soon. You still owe asset reporting and need cover for an unoccupied property.

If you sell, Spain taxes the gain as a tax resident with no inflation relief, and the reinvestment exemption does not apply because it covers only your main home. Compare that tax with the yearly cost and tax of keeping the property.

Deciding what to do with your home and when to give notice

• Find your lease or mortgage terms and note the notice method, notice period, break clause and any lender or landlord consent rules: before you start

• Choose between giving up, subletting or keeping. Giving up (ending the lease or selling) is a clean break with no running costs and fewer ties to your home country, but a sale can trigger capital gains tax and you lose your fall-back home. Subletting or letting out brings income, but it is taxable at home and reportable in Spain, and it needs your landlord's or mortgage lender's consent, plus tenancy duties, empty periods and management costs. Keeping it empty means paying mortgage, taxes, utilities and insurance, insurers may limit cover for an empty home, and a home kept available can count towards home-country residence. Spain taxes residents on worldwide income, including a modest imputed income on unlet foreign property. Foreign assets above the reporting threshold must also be declared in Spain: at the decision point, before you give any notice

• Follow the steps for your housing type. Renters give written notice, pay rent to the end date, clear arrears, book a final inspection, recover the deposit and close utility and council tax accounts. Owners decide whether to sell, let or keep, instruct an agent or solicitor, arrange insurance and lender consent, register rental income for tax and sort the bills. If your housing comes with a job, follow your contract and employer's process for the vacate date. In shared housing, give notice to the head tenant or landlord and get a written release from any joint tenancy, because remaining tenants can stay liable: once you have chosen your option

• Set the notice date so your tenancy ends a few days after your planned departure and not before your Spanish home or bridge stay is secured. In the UK, tenants on a periodic tenancy usually give one month's notice, with a two-month tenant notice period being phased in, and fixed terms need a break clause or the landlord's agreement. In the US, month-to-month tenancies typically need 30 days (some states 60, some 20 or less), and fixed leases run to the end date unless there is a break clause or surrender. Owners need no notice but must arrange the sale or letting: at least one full notice period before your move-out date, counted by your lease

• Write down the exact move-out date, the key handover date and time, the last day rent and utilities are payable, and who is liable afterwards. Ask the landlord or agent to confirm in writing, ideally with a signed surrender agreement saying the tenancy ends on that date and nothing more is owed. Keep dated photos or an inspection report, final meter readings, the key return receipt and deposit return details, and send notice the way the lease requires with proof of delivery: when you serve notice and again at handover

• If notice must go in before your Spanish home is confirmed, book a short bridge stay in Spain (an aparthotel or a month-to-month furnished let), ask your landlord for a short extension or rolling monthly terms, stay with family or friends, or store your belongings and ship them later. Avoid signing a Spanish lease unseen, since landlords often want proof of income, an NIE (foreigner ID number) and a deposit, and arriving first on a short rental lets you view homes in person and avoid scams. If your date slips, expect holdover rent or penalty charges, so agree any extension in writing straight away: if notice is due before your Spanish home is confirmed, or if your move date slips

Checklist

• Add the rent from your home-country property to your Spanish IRPF (income tax) return as property rental income.

• Report the rent in your home country too: UK landlords file a Self Assessment return, and US citizens and green card holders file Form 1040 Schedule E.

• If you are a UK landlord living abroad, apply to HMRC to receive rent gross, or expect your agent or tenant to withhold basic-rate tax.

• Claim the Spanish double taxation deduction for tax paid abroad, calculated separately for each source of income.

• Tell your home insurer you have moved abroad or let the property, and ask what changes after 30 or 60 days empty.

• Switch to a landlord policy if you let the property, or ask about specialist unoccupied-property cover if it stays empty.

Frequently asked questions

Can I get a reduction on rent from a long-term home-country letting?

Yes, a long-term residential let can get a 50% reduction on net rental income in your Spanish return. The reduction was 60% for leases signed before 2024. Net income is rent minus deductible costs such as interest, local property taxes, insurance, repairs and depreciation.

How is rent paid in pounds or dollars turned into euros for the Spanish return?

You convert each amount at the exchange rate on the date it accrued, not one yearly rate. Keep a record of the rate you used for each payment and expense.

What happens if I pay more foreign tax than Spain would charge?

Spain credits only the lower of the foreign tax you paid or the Spanish tax on that same income. You can carry any unused excess forward for the next four years.

Do I pay Spanish tax if I sell my home-country property at a gain?

Yes, a Spanish tax resident is taxed in Spain on the gain from selling a foreign property. The gain goes in the savings income base at progressive rates from 19% to 30%, and Spain credits tax already paid on it abroad.