Spanish Resident Income Tax (IRPF) for Property Owners: Rental Reductions, Imputed Income and Capital Gains in 2026

The IRPF (Impuesto sobre la Renta de las Personas Fisicas) is Spain’s progressive income tax for residents. If you own property in Spain and become tax resident, your rental income, imputed income on second homes and capital gains all move from the flat-rate IRNR to progressive IRPF bands running from 19 per cent to 47 per cent. The shift changes how much you pay, what you can deduct, which rental reductions apply, and which exemptions apply to a property sale. This guide maps the three property income types under IRPF, the 2026 rental reduction tiers, and compares them head-to-head with the non-resident IRNR.

What is the IRPF and how does it differ from the IRNR?

The IRPF is Spain’s personal income tax for tax residents, governed by Ley 35/2006. It taxes worldwide income on a progressive scale from 19 per cent to 47 per cent in Andalusia. The IRNR (consolidated as Real Decreto Legislativo 5/2004) taxes only Spanish-source income at flat rates for non-residents. Residency, not nationality, determines which regime applies.

The residency test turns on the 183-day rule: if you spend more than 183 days in Spain in a calendar year, or if your spouse and minor children live there, or your main economic centre is in Spain, you are a tax resident and fall under IRPF. Our guide to the 183-day tax residency rule covers the tests in detail. If you remain non-resident, the IRNR framework governs your Spanish property income instead.

The structural difference matters. The IRNR applies flat rates (19 per cent for EU, Iceland and Norway residents, 24 per cent for the rest of the world) with limited deductions. The IRPF applies progressive bands and allows every resident to deduct expenses, claim a rental reduction of 50 to 90 per cent, apply a personal minimum and claim reliefs unavailable to non-residents.

What are the IRPF tax rates for property income in 2026?

The IRPF splits income into two bases. Rental income and imputed income go into the general base, taxed at 19 to 47 per cent in Andalusia. Capital gains go into the savings base, taxed at 19 to 30 per cent. Spain entered 2026 without a new Ley de Presupuestos Generales del Estado: the government signed the third consecutive prorroga in December 2025, extending the 2023 budget. This means the 2025 scales remain in force for the 2026 tax year, as no legislative rate change has been enacted.

The general base combines a state scale and a regional scale. The state scale (Article 63 Ley IRPF) breaks at 12,450, 20,200, 35,200, 60,000 and 300,000. The Andalusia regional scale (Article 23 of Ley 5/2021, as deflacted by Decreto-ley 7/2022) breaks at 13,000, 21,100, 35,200 and 60,000. Because the combined rate changes whenever either scale moves, the combined marginal rate for an Andalusia resident has eight brackets:

General base (EUR)	State rate	Andalusia rate	Combined rate
0 to 12,450	9.50%	9.50%	19%
12,450 to 13,000	12%	9.50%	21.5%
13,000 to 20,200	12%	12%	24%
20,200 to 21,100	15%	12%	27%
21,100 to 35,200	15%	15%	30%
35,200 to 60,000	18.50%	18.50%	37%
60,000 to 300,000	22.50%	22.50%	45%
Above 300,000	24.50%	22.50%	47%

Both scales are published by the AEAT in its Manual practico de Renta 2025. The combined top marginal rate in Andalusia reaches 47 per cent on income above EUR 300,000.

The savings base, which includes capital gains from property sales, dividends and interest, uses a separate scale:

Savings base (EUR)	Rate
0 to 6,000	19%
6,000 to 50,000	21%
50,000 to 200,000	23%
200,000 to 300,000	27%
Above 300,000	30%

The top savings rate rose from 28 per cent to 30 per cent for the 2025 tax year under Disposicion Final 7.1 of Ley 7/2024, according to the AEAT. This 30 per cent top bracket remains in force for 2026 given the budget prorroga.

How does IRPF tax rental income for residents?

Resident landlords report net rental income in the IRPF general base after deducting all directly related expenses: property management, community fees, insurance, repairs, mortgage interest and depreciation at 3 per cent of acquisition cost excluding land. The net figure is then reduced by the applicable rental reduction before it enters the general base, where it is taxed at the progressive 19 to 47 per cent scale.

This is the single biggest change from the IRNR. Under the non-resident regime, EU residents can deduct expenses (Article 24.6 Ley IRNR) but non-EU residents cannot: they pay 24 per cent of gross rent. Under IRPF, every resident deducts expenses regardless of nationality, and can also claim a rental reduction that has no equivalent under the IRNR.

The Ley 12/2023 rental reduction tier system

Since 1 January 2024, the rental reduction on net positive income from habitual-residence lets operates on a four-tier system introduced by Ley 12/2023. The tier depends on the contract and property circumstances at the time of signing:

Tier	Reduction	Conditions
90 per cent	90 per cent	Stressed zone, new contract by same landlord, rent cut by more than 5 per cent vs previous contract
70 per cent	70 per cent	Stressed zone, first-time let to tenant aged 18 to 35, or social housing to public body or non-profit
60 per cent	60 per cent	Property rehabilitated within two years before contract date
50 per cent	50 per cent	All other habitual-residence lets (default)

No Andalusian municipality has been declared a stressed zone (zona de mercado residencial tensionado) as of 2026, so Costa del Sol contracts default to the 50 per cent tier unless the property was recently rehabilitated. Contracts signed before 26 May 2023 are grandfathered at 60 per cent under Disposicion Transitoria 38 of Ley 35/2006 for the life of the tenancy. Tourist and seasonal lets do not qualify for any reduction.

If expenses exceed rental income, the negative balance can be carried forward for four years against future positive rental income from the same property under Article 23.4 of Ley 35/2006. This is a resident-only provision; non-residents under the IRNR have no loss carryforward.

Consider a landlord earning EUR 30,000 in annual rent with EUR 8,000 in deductible costs. The net income is EUR 22,000. At the default 50 per cent reduction, only EUR 11,000 enters the general base, and after the personal minimum of EUR 5,550 (Article 57.1 Ley 35/2006) reduces the taxable base further, the effective tax on that rental income is a fraction of what a non-resident pays. A non-EU non-resident pays 24 per cent of the gross EUR 30,000: EUR 7,200, with no reduction and no deductions. Our non-resident rental income guide covers the IRNR calculation in detail, and our resident rental reduction guide covers the tier system in depth.

How does IRPF tax imputed income on second homes?

Under Article 85 of Ley 35/2006, a resident must declare imputed income on any urban property that is not their main residence and not rented out. The imputed amount is 2 per cent of the valor catastral, or 1.1 per cent if the value was revised after January 2012. The 1.1 per cent rate has been extended to the 2023, 2024 and 2025 tax periods by Disposicion Adicional 55 of Ley 35/2006, most recently through RDL 2/2026 of 3 February, according to the AEAT. It enters the general base and is taxed at progressive rates.

The calculation is identical to the IRNR imputed income mechanism: 2 per cent of the cadastral value shown on your IBI bill, or 1.1 per cent for properties with revised values, according to the AEAT’s calculation guidance. The key difference for residents is that your main residence (vivienda habitual) is exempt from imputed income entirely. Non-residents have no main residence in Spain by definition, so all their property triggers imputed income unless rented.

For a resident with a EUR 200,000 second home in Marbella whose cadastral value is EUR 80,000, the imputed income is 2 per cent of 80,000: EUR 1,600 per year. This enters the general base alongside other income and is taxed at progressive rates. The same property owned by a non-EU non-resident generates the same EUR 1,600 imputed amount but taxed at the flat 24 per cent IRNR rate: EUR 384. Our imputed income tax guide for non-residents covers the non-resident calculation.

How does IRPF tax capital gains on property sales?

Residents report capital gains in the IRPF savings base, taxed at 19 to 30 per cent on the profit (sale price minus acquisition cost minus selling costs). There is no buyer retention: the 3 per cent Modelo 211 withholding that applies to non-residents does not exist for residents. Two exemptions can eliminate the gain entirely: reinvestment and the over-65 rule.

For a EUR 100,000 gain, the resident tax is: 19 per cent on the first 6,000 (EUR 1,140), 21 per cent on the next 44,000 (EUR 9,240) and 23 per cent on the remaining 50,000 (EUR 11,500), totalling EUR 21,880. The same gain for a non-resident is taxed at a flat 19 per cent: EUR 19,000, with a 3 per cent buyer retention applied to the sale price. Our non-resident CGT guide covers the retention mechanism.

Under IRPF, Article 38 of Ley 35/2006 exempts the capital gain from selling your main residence if you reinvest the proceeds in a new main residence within two years. The exemption is proportional: reinvest half and half the gain is exempt. Article 33.4 offers a more generous relief for residents aged 65 and over: the full gain on the main residence is exempt with no reinvestment requirement, according to the AEAT. Neither exemption has a direct equivalent under the IRNR for non-EU non-residents. EU and EEA non-residents can claim the reinvestment exemption under the Seventh Additional Provision of the IRNR Law, but the over-65 exemption does not extend to non-residents.

What exemptions and reliefs can resident property owners claim?

IRPF residents deduct mortgage interest on loans for the main residence taken before 1 January 2013 under a transitional regime, property management fees, community charges, insurance, repairs and 3 per cent depreciation on rental property. The personal and family minimum of EUR 5,550 reduces the effective tax. Non-residents under the IRNR have no personal minimum and non-EU residents cannot deduct expenses. Our IRPF mortgage deduction guide covers the transitional regime in detail.

On wealth tax, tax residents are liable on worldwide assets, while non-residents pay only on Spanish-situated assets. Andalusia applies a differential bonification (Disposicion Transitoria 5a of Ley 5/2021, introduced by Ley 12/2023 for the 2024 tax year) that offsets the regional wealth tax quota against the state solidarity tax (ITSGF) quota. Below the ITSGF EUR 3 million threshold, this means residents in Andalusia effectively pay zero regional wealth tax, though those above EUR 2 million in net assets must still file a declaration. The earlier blanket 100 per cent bonification under Article 25 bis applied only for 2022 and 2023 and is no longer in force. Our wealth tax guide covers the thresholds and the Andalusia bonification in detail. The Spanish property tax calendar tracks when each filing falls due.

IRNR vs IRPF: which regime applies to you?

The decision turns on tax residency. If you pass the 183-day test or have your centre of economic activity in Spain, you file IRPF via Modelo 100. If not, you file the IRNR via Modelo 210. New residents who relocate for work may opt into the Beckham Law (Article 93), paying a flat 24 per cent on Spanish employment income for six years, but property income still flows through the standard IRPF bases.

The Beckham Law (Article 93 Ley IRPF) lets qualifying relocators pay a flat 24 per cent on Spanish-source employment income up to EUR 600,000 (47 per cent above) for the year of arrival plus five years, according to the AEAT. Since the 2023 reform under Ley 28/2022, the regime extends to digital nomads, entrepreneurs and highly qualified professionals. Property income under the Beckham regime is not taxed at the flat 24 per cent rate: rental income and capital gains still flow through the standard IRPF general and savings bases. Our Beckham Law guide covers eligibility.

Comparison: IRNR vs IRPF for property owners

Dimension	IRNR (non-resident)	IRPF (resident)
Rental income rate	19 per cent EU, Iceland, Norway / 24 per cent rest of world, flat	19 to 47 per cent progressive (Andalusia)
Rental reduction	None	50 to 90 per cent (Ley 12/2023 tiers)
Expense deductions	EU: yes; non-EU: no	Yes, all residents
Loss carryforward	No	Yes, 4 years against same property (Art 23.4)
Imputed income	2 per cent / 1.1 per cent of catastral at flat rate	Same calculation, progressive rate; main residence exempt
Capital gains rate	19 per cent flat for all	19 to 30 per cent savings scale
Main residence CGT relief	Reinvestment only (EU / EEA)	Reinvestment (all) plus over-65 full exemption
3 per cent buyer retention on sale	Yes (Modelo 211)	No
Wealth tax	Spanish assets only	Worldwide; Andalusia DT 5a bonified
Personal minimum	None	EUR 5,550
Filing model	Modelo 210	Modelo 100 (or 151 if Beckham)

If you are leaving Spain, the exit tax may apply to unrealised gains on Spanish assets above certain thresholds.

This guide is general information, not legal or tax advice. Rules change and individual circumstances differ. Verify current requirements with an independent lawyer (abogado) or tax advisor (gestor/asesor fiscal) before acting.