In July this year, the Spanish National Court issued a relevant ruling affecting non-resident owners with rented properties in Spain. Until now, only residents of the European Union were allowed to deduct expenses related to rental income, while residents of third countries were required to pay tax on the full amount received.
The National Court recognized this right for a taxpayer residing in the United States, considering that denying the deduction violates both the principle of free movement of capital under the Treaty on the Functioning of the European Union and the principle of non-discrimination set out in the Double Taxation Agreement between Spain and the United States.
Although this ruling does not establish legal precedent, it represents an important step towards equalizing the tax treatment of EU and non-EU residents. It is still too early to initiate claims for tax corrections or refunds for non-prescribed fiscal years, but the decision marks significant progress in addressing a long-standing discriminatory situation.