Can I deduct expenses for a Spanish property that is not rented out?

Why nothing comes off

Imputed income is not a real income, so there is nothing to subtract costs from. The law sets the taxable base directly as a percentage of the cadastral value, and that figure is already intended as a modest, net amount. The tax office therefore does not allow costs against it, regardless of how much you spent on the house during the year.

This applies equally to an owner in Ireland at 19% and one in the UK at 24%. Being EU resident does not open any deductions for a home that is not let.

Costs owners often ask about

• IBI: paid to the town hall, not deductible from imputed income.
• Community fees: not deductible.
• Mortgage interest: not deductible, even on a Spanish loan.
• Home insurance, utilities, maintenance: not deductible.
• Fees paid to a gestor or service: not deductible.

When expenses do count

The picture changes if you let the property. For the days it is rented, you declare rental income instead of imputed income. Owners resident in the EU or EEA may then deduct expenses linked to the letting, pro rata to the days let. Owners resident in the UK, the US or other non-EU countries are taxed at 24% on the gross rent, with no deductions.

Example: an Irish owner lets a flat for 91 of 365 days and pays €1,460 of community fees for the year. Roughly a quarter, €1,460 × 91/365 = €364, can go against the rent. The other days remain imputed income with no deduction.

Keep the receipts anyway

Even if you never let, invoices for improvements matter later. When you sell, the cost of improvement works increases your acquisition cost and reduces the taxable gain. Keep them with the deed.

More on letting: the guide to renting out. For the basic calculation, see how the tax is calculated.