Taxes for American Owners of a Spanish Home

This guide covers the two tax bills on a Costa del Sol home owned by a US citizen. What Spain charges a non-resident American owner and when it falls due, and what the IRS wants on the same property every year. It is general information taken from primary sources, and it is not tax advice.

Spain charges you 24%, and a European owner 19%

Start with the rate, because it is the one thing about Spanish property tax that is genuinely different for an American.

Article 25.1.a of the Non-Resident Income Tax Law sets the general rate for non-residents at 24%, and reduces it to 19% only for taxpayers resident in another EU or EEA state with effective exchange of tax information. The United States is neither, so you pay 24.

The rate is the smaller half of it. Article 24.1 taxes the importe íntegro, the gross amount. Article 24.6 then grants the right to deduct expenses, and grants it to EU and EEA residents only. A Dutch owner deducts mortgage interest, IBI, community fees, insurance, repairs and letting costs. IBI is the annual local property tax, and the community fees are the Spanish equivalent of HOA dues. An American deducts nothing.

The same rent, two owners

	American owner	EU or EEA owner
Gross rent	€30,000	€30,000
Deductible costs	none	€12,000
Taxable base	€30,000	€18,000
Rate	24%	19%
Spanish tax	€7,200	€3,420

Same building, same tenant, same costs, and more than double the bill. Worth knowing before you build a rental yield into the decision rather than after.

If you never rent it out

Spain still charges you. It attributes a notional income to non-resident individuals who own urban property for their own use, under Article 13.1.h of the same law.

The base comes from Article 85.1 of Ley 35/2006. It is 2% of the cadastral value, reduced to 1.1% where the cadastral values were revised, modified or determined by a general collective valuation procedure that took effect in the current tax period or in the previous ten. For a 2026 return that means values effective from 2016 onward. Where there is no cadastral value, or it has not been notified, the 1.1% applies to half of the higher of the value checked by the administration and the acquisition price.

On a cadastral value of €200,000 the numbers are small. At the 1.1% base that is €2,200, and 24% of it is €528 for the year. At the 2% base it is €4,000, and the tax is €960. An EU owner on the same property pays €418 or €760, because the rate difference follows through here too.

The cadastral value is not the market value and is usually well below it. Ask for it before you make an offer. It appears on the IBI receipt, and it sets both this charge and the IBI bill itself.

When you file in Spain: Modelo 210

The deadlines are set by Orden EHA/3316/2010, and they are not the same for every kind of income. This is where a lot of secondhand advice goes wrong.

Imputed income on a home kept for your own use. Filed between April 1 and December 31 of the year following the one it accrues in.
Rental income with tax to pay. Filed in the first twenty calendar days of April of the year following accrual, whether you file each let separately or group them.
Returns with a nil result. Filed between January 1 and 20 of the following year.
Income from a sale of the property. Filed within three months once the one-month period running from the date of transfer has elapsed.

Each owner files separately. A couple who own the home jointly file one Modelo 210 each, on their share.

Selling: 19%, and the 3% the buyer holds back

On a sale, Article 25.1.f.3 taxes the capital gain of a non-resident at 19%. That rate is not restricted to EU and EEA residents, so on the gain you are charged the same as a Dutch or German seller.

Article 25.2 then obliges the buyer to withhold and pay over 3% of the price on account of your liability. That is not an extra tax. It is a payment on account, and it is settled against the real bill on your return.

Say you bought at €450,000 and sell at €550,000. The gain is €100,000 and the Spanish tax is €19,000. The buyer has already paid €16,500 to the tax office, so €2,500 remains. Where the 3% exceeds the tax due, the difference is reclaimed on the same return.

Wealth tax, only at the top

Spain has a state tax on large fortunes, the Impuesto Temporal de Solidaridad de las Grandes Fortunas, created by Ley 38/2022. Everyone, resident or not, first deducts a €700,000 allowance, so it only reaches net wealth above €3,700,000. Non-residents are liable por obligación real on assets situated in Spain. On the amount left after the allowance, the first €3,000,000 is taxed at 0%, and the scale above it runs 1.7, 2.1 and 3.5%. It was enacted for two years and then extended by Real Decreto-ley 8/2023 until Spain reviews wealth taxation as part of the regional financing reform, so it is still in force.

For most buyers this is context rather than a bill, and anywhere near that line it is a reason to have a Spanish adviser involved early.

The American half starts with Form 1040

Nothing about buying abroad reduces your US filing. The IRS puts it plainly: a citizen or resident alien abroad is “subject to tax on worldwide income from all sources and must report all taxable income and pay taxes according to the Internal Revenue Code”, and filing rules are “generally the same whether you are in the United States or abroad”.

Citizenship is the trigger, not residence. If you sell up and move to Málaga permanently, you still file. Citizens residing overseas do get an automatic two-month extension, which moves the filing date into June.

Rental income on Schedule E, and the 30-year rule

Spanish rent goes on Form 1040, Schedule E, Part I, on a net basis with US-allowable expenses. The costs Spain refuses you are allowed here, which softens the picture a little.

Depreciation is where American owners get caught. The property sits outside the United States, and under 26 U.S.C. §168(g)(1)(A) tangible property used predominantly outside the United States falls into the Alternative Depreciation System. IRS Publication 527 Table 2-1 gives the ADS recovery period for residential rental property as 30 years straight line for property placed in service after 2017, and 40 years for earlier property. The domestic 27.5-year schedule does not apply to a home in Spain.

Form 1116, and the treaty behind it

Spanish non-resident income tax paid on the property is relieved through the foreign tax credit, claimed on Form 1116. Three points from the IRS page matter here.

Only income, war profits and excess profits taxes qualify. Spanish purchase taxes, ITP on a resale and IVA on new construction, are not income taxes and do not qualify.
The credit can instead be taken as an itemized deduction on Schedule A, but the IRS says “in most cases, it is to your advantage to take foreign income taxes as a tax credit”.
Where a treaty entitles you to a reduced rate of foreign tax, “only that reduced tax qualifies for the credit”.

The treaty itself is the 1990 Convention as amended by the 2013 Protocol. The State Department’s record has the agreement “signed at Madrid January 14, 2013” and “entered into force November 27, 2019”. A great deal of American-facing writing still describes the pre-2019 position, so check the date on anything you read. The IRS treaty page carries the 1990 text and links the Protocol.

What you report, and what you do not

Form 8938. The house itself is out. The IRS states that “foreign real estate is not a specified foreign financial asset required to be reported on Form 8938”. Hold the property through a Spanish company and that changes, because the interest in the entity is reportable once you pass your threshold. The thresholds for filers living abroad are $200,000 on the last day of the year or $300,000 at any point if unmarried, and $400,000 or $600,000 filing jointly. For filers living in the US they are $50,000 or $75,000, and $100,000 or $150,000 filing jointly.

The FBAR. This is the one that reaches past the house itself. A US person must file where the aggregate value of their foreign financial accounts “exceeded $10,000 at any time during the calendar year reported”. Read that as a high-water mark rather than a year-end balance. The completion money passing through your new Spanish account clears $10,000 several times over on the day it lands, even if the account holds a few hundred euros by December. It is FinCEN Form 114, filed through FinCEN’s BSA E-Filing System, and the IRS is clear that “you don’t file the FBAR with your federal tax return”. Due April 15, with an automatic extension to October 15.

Selling, and the $250,000 exclusion

On the US side the gain is computed and reported in dollars. IRS Topic no. 701 allows you to exclude “up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return”, but only where you meet both the ownership test and the use test, which require the home to have been owned and used as a residence “for at least 24 months (2 years) out of the last 5 years”. You are also ineligible if you excluded gain on another home in the two years before the sale.

A vacation home used a few weeks a year does not meet the use test. So the sensible planning assumption for most Costa del Sol owners is a fully taxable US gain, relieved by the foreign tax credit for the Spanish 19% rather than by the exclusion.

Turning euros into dollars

Everything reaches the IRS in dollars. The IRS says it “generally accepts any posted exchange rate that is used consistently”, and directs you to the spot rate prevailing “when you receive, pay or accrue the item”. It also publishes yearly average rates, which for the euro were 0.886 in 2025 and 0.924 in both 2024 and 2023, expressed in euros per dollar. Pick one method and hold to it, because consistency is what the IRS asks for and what makes the file defensible years later.

Inheritance, and a Spanish will

Spanish inheritance tax applies to Spanish property whoever inherits it and wherever they live. Since 2014 a non-resident heir has been entitled to the rules of the region where the property is, rather than the less generous state rules (Ley 29/1987, second additional provision). In Andalucía those rules are generous. A spouse, child or parent has a reduction of €1,000,000 on what they inherit (Ley 5/2021 de Andalucía, article 28), and a 99% relief on any tax still due (article 39). For a family home passing to a spouse or children, the Spanish tax is usually nil or close to it.

The European Union’s succession rules allow a person to choose that “the law of their country of nationality” governs their estate, rather than the law of the country where they lived (European e-Justice Portal, succession). Most buyers make a Spanish will limited to their Spanish assets, choosing the law of their own state, so that the home passes as they intend without touching their US will. Your Spanish lawyer drafts it, and it is signed at a notary in an afternoon.

A year in dates

When	What
January 1 to 20	Modelo 210 for the previous year where the result is nil
April 1 to 20	Modelo 210 on rental income with tax to pay, for the previous year
April 15	Form 1040 due, unless you are abroad and take the automatic two-month extension
April 15	FBAR due, with an automatic extension to October 15
April 1 to December 31	Modelo 210 on imputed income, for the previous year
June	Extended filing date for citizens residing abroad
On a sale	Buyer withholds 3%, and your Modelo 210 follows within three months once the one-month period from the transfer has elapsed

What I do here, and what I do not

I am a buyer’s agent, not a tax adviser, and I say so when a question needs one. Cross-border filing belongs with a US-qualified preparer and a Spanish gestor. A gestor is the filing agent most owners here use, and both are worth lining up before completion rather than the following spring.

What I do is make sure the numbers they work from are right. The purchase price, the buying costs and the cadastral value recorded in the deed. That is part of the buying service, and it starts with a call. The general Spanish position is set out in what it costs to own a home in Spain, Modelo 210 explained and the cost of buying.

General information, dated September 21, 2026, not tax advice. Rates and filing dates change. Always have your own position checked by a US-qualified preparer and a Spanish adviser.

Common questions

How much tax do Americans pay on rental income from a Spanish home?

24% of the gross rent, with no expenses deducted. Article 25.1.a of the Non-Resident Income Tax Law sets the general rate at 24% and reduces it to 19% only for residents of another EU or EEA state with effective exchange of tax information. Article 24.1 taxes the gross amount and the right to deduct expenses in Article 24.6 belongs to those same EU and EEA residents. On €30,000 of rent with €12,000 of costs, an American pays €7,200 where a Dutch owner pays €3,420.

What do I pay in Spain if the house sits empty?

An annual imputed income charge. The base is 2% of the cadastral value, reduced to 1.1% where the cadastral values were revised by a general collective valuation that took effect in the current tax period or the previous ten, which for a 2026 return means values effective from 2016 onward. The base is taxed at 24% for an American. On a cadastral value of €200,000 at the 1.1% base, that is €528 for the year.

When is the Spanish Modelo 210 actually due?

It depends on the income. Imputed income from a home kept for your own use is filed between April 1 and December 31 of the year after it accrues. Rental income with tax to pay is filed in the first twenty calendar days of April of the following year, whether separately or grouped. Returns with a nil result are filed between January 1 and 20. Income from a sale is filed within three months once the one-month period from the date of transfer has elapsed.

Do I keep filing a US return if I own property in Spain?

Yes, and permanently. The IRS states that US citizens and resident aliens abroad are 'subject to tax on worldwide income from all sources' and that filing rules are 'generally the same whether you are in the United States or abroad'. Citizenship rather than residence is the trigger, so moving to Spain does not end it. Citizens residing overseas get an automatic two-month extension to file.

Do I report the house itself to the IRS?

Not the house. The IRS is explicit that 'foreign real estate is not a specified foreign financial asset required to be reported on Form 8938'. Two things around it often are. If you hold the property through a Spanish company, the interest in that company is reportable once you pass your threshold. And the Spanish bank account you open to run the property is a foreign financial account for FBAR purposes.

Why is my Spanish rental depreciated over 30 years instead of 27.5?

Because it sits outside the United States. Under 26 U.S.C. §168(g)(1)(A) tangible property used predominantly outside the United States falls into the Alternative Depreciation System, and IRS Publication 527 Table 2-1 gives the ADS recovery period for residential rental property as 30 years straight line for property placed in service after 2017, and 40 years before that. The domestic 27.5-year schedule does not apply.

Can I use the $250,000 main-home exclusion when I sell in Spain?

Only if the home genuinely was your main home. The exclusion is 'up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return', and it requires both the ownership test and the use test, which means the home was owned and used as a residence 'for at least 24 months (2 years) out of the last 5 years'. A vacation home used a few weeks a year does not meet the use test, so the reasonable expectation is a fully taxable US gain relieved by the foreign tax credit.

Is there a US-Spain tax treaty, and does it stop double taxation?

Yes. The governing instrument is the 1990 Convention as amended by the Protocol signed at Madrid on January 14, 2013, which the US State Department records as having entered into force on November 27, 2019. Relief in practice comes through the foreign tax credit on Form 1116. Note the IRS restriction that where a treaty gives you a reduced rate of foreign tax, only the reduced tax qualifies for the credit, and that only income taxes qualify, so Spanish purchase taxes such as ITP and IVA do not.

Sources

Michael works in English and Spanish. Your side of the purchase runs in English, and the negotiation with the Spanish side runs in Spanish. The other guides linked here are written in English.

Buying in Spain from the United States

Taxes for American owners of a Spanish home