I live in Germany: how do I avoid double taxation on my Spanish property?

Spain first, at the EU rate

As a German tax resident, you are an EU resident for Spain. You pay 19 % on:

• the imputed income of a home you do not let;
• the net rental income, after expenses linked to the let;
• any gain when you sell.

Example: a flat in Mallorca with a cadastral value of 130,000 €, on the 1.1 % coefficient, gives 1,430 € of imputed income and 271.70 € of Spanish tax for a full year.

Germany second, with a credit

The treaty signed in 2011 replaced the older exemption system with the credit method (Anrechnung). Germany taxes your worldwide income, including Spanish rent and gains, and then deducts the Spanish tax from the German tax on that same income. In the German return, rental income is reported on the property pages (Anlage V) and the foreign tax on Anlage AUS.

A simplified case: Spanish net rent of 8,000 € taxed at 19 % in Spain, so 1,520 €. If the German tax on the same 8,000 € comes to 2,400 €, Germany credits the 1,520 € and you pay the remaining 880 €. If the German tax were lower than the Spanish one, the excess Spanish tax would not be refunded.

German income rules apply to the German calculation, which can differ from the Spanish net figure. A Steuerberater can align both.

Imputed income: no German credit

Germany does not tax the use of your own holiday home, so there is no German tax on that income and nothing to credit the Spanish imputed-income tax against. It is a pure Spanish cost, not a double charge.

Austrian readers

Austria's treaty with Spain works differently: the Spanish income is generally exempt in Austria but counted to set the rate (Befreiung mit Progressionsvorbehalt). Check with an Austrian adviser.

A short checklist

1. File Modelo 210 every year in Spain, even with no rent.
2. Keep the Spanish return and payment receipt as proof for Anlage AUS.
3. Use a certificate of residence from your German Finanzamt if Spain asks for proof.

More on the logic: will I be taxed twice, and the calculator for the Spanish figure.