Spain’s way of taxing non-residents has been questioned for years. Two recent developments have put this issue in the spotlight:
- The European Commission has opened a case against Spain, saying that some of its tax rules for non-residents may be unfair and discriminatory.
- Spain’s Central Economic-Administrative Tribunal (TEAC) has ruled that foreigners using the “Beckham Law” must pay tax on their own main home in Spain, even if they do not rent it out.
Both matters raise the same question: are non-residents and impatriates being taxed more harshly than Spanish residents?
What the European Commission Says
In June 2025, the European Commission formally challenged Spain’s rule that non-residents must pay tax on a “notional rent” (a small percentage of the property’s cadastral value) even when they do not rent the property.
- Residents in Spain do not pay this tax on their main home.
- Non-residents must pay it on all their Spanish properties, even if they live in the property themselves.
Brussels considers this to be discriminatory and a possible breach of EU law. Spain was given two months to respond. If it does not provide a solution, the case could go to the Court of Justice of the European Union.
The New TEAC Ruling
On 17 July 2025, the TEAC confirmed that people using the special tax regime for impatriates (known as the “Beckham Law”) must also pay this “notional rent” tax on their main home in Spain.
This creates a clear difference:
- A Spanish resident living in their home does not pay this tax.
- A foreign professional under the Beckham Law living in the same type of home does pay.
The TEAC’s decision is binding for the Spanish tax authorities, so this is now the practice they will follow.
Example: How Much Tax Are We Talking About?
Let’s assume you own a property in Spain with a cadastral value of €500,000 and you are taxed under the Beckham Law.
- Imputed income: 2% of €500,000 €10,000 (this percentage may be 1.1% if the cadastral value has been updated recently).
- Tax rate under Beckham Law (IRNR): 24% flat.
- Annual tax due: €10,000 × 24% = €2,400 per year. This is tax on income you never actually received. It is a notional figure that exists only for tax purposes.
Why This Matters
Seen together, the Commission’s action and the TEAC’s ruling show a wider pattern: Spain applies stricter rules to non-residents and impatriates than to residents. Courts in Spain have already questioned this approach, and now the EU is stepping in as well.
If the EU Court eventually rules against Spain, the law would need to change. It could also allow taxpayers to claim refunds for taxes paid in past years.
What Non-Residents and Impatriates Should Know
- If you are under the Beckham Law and own your main home in Spain, you currently need to declare and pay this tax each year.
- If you are a non-resident EU citizen, you are also subject to this tax, even if the property is your main or only home in Spain.
- The situation may change: EU pressure and Spanish court cases could lead to a different outcome in the future.
Final Word
For now, the tax must be paid as required. But with growing legal challenges in Spain and from the EU, change may be on the way. Non-residents and impatriates should stay informed, as future rulings could affect both their ongoing obligations and their right to claim refunds.
