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Article copyrighted © 2025. Plagiarism will be criminally prosecuted

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
1^st of July 2025

Well, well, well. Who could have guessed?

The Union formally opened an inquest against Spain on the 18^th of June 2025 for unlawful tax discrimination of non-residents.

Spain levies an annual non-resident tax (in Spanish, Impuesto sobre la Renta de No Residentes or IRNR for short). This tax levies a rate ranging between 1.1% and 2% of the cadastral value of a property. The cadastral value, as a general rule of thumb, is one-third below the market value of a property. For most properties, a couple of hundred euros a year,

Basically, any non-resident who owns property in Spain must pay it.

The Union believes this tax is discriminatory (as Spanish nationals do not pay for it) and also that it goes against the free circulation of capital and people, which is a core tenet of the Union that pervades all its legislation. This is a founding principle enshrined by the Union’s Foundational Treaty of Rome. 

Long story short, in all likelihood Spain – again – will be forced to discontinue this non-resident tax as it breaches core principles on which the Union was built in 1957 by its Founding Fathers.

So, if the Union gets all worked up on a paltry tax that raises only a couple of hundred euros a year per taxpayer, imagine its reaction when it gets wind of a new 100% tax against non-resident, non-EU buyers that raises HUNDREDS OF THOUSANDS OF EUROS per taxpayer… bonkers.

Since January 2025, I’ve been relentlessly badgering that the Union would not allow a wayward Member State (read Spain) to enact a 100% tax on non-EU buyers that undermines core tenets of the Union.

Lately, Spain is proving most adept at undermining the unity of any international organisation it belongs to, or picking uncalled fights with other countries (Union, NATO, UN, Israel, Algeria, Argentina, etc), garnering a great deal of international controversy, for the sake of capitalising on it politically for its national audience and deflecting the real domestic issues at hand.

Bottom line, the proposal for a crazy new 100% tax on non-resident, non-EU buyers is dead on arrival. Even if it is enacted, the Union will quash it, and the Kingdom of Spain will have to pay huge compensation to taxpayers as a result, plus interest on top. Let alone lose face and tarnish its reputation in the process.

And all this, for the sake of a single politician’s ambition who is beleaguered by high-profile court cases, day in and day out. And the more politically unstable and charged Spain becomes, the crazier its laws. 

In conclusion

If the Union has decidedly started a procedure to put an end to a paltry tax that only raises a few hundred euros a year, imagine what its stance is going to be on a crazy new tax law which levies HUNDREDS OF THOUSANDS of euros per taxpayer (as in effect it DOUBLES property prices) and poses a serious threat to the movement of people and capital within the Union…

The Union must defend itself, not only from foreign threats, albeit - most fundamentally - from domestic foes that threaten our unity and core values. The Union is evolving and must react to face threats to ensure its own survival. There is no strength without unity (Ní neart go cur le chéile).

Being the jaded person I am, I have to question the (very) opportune timing of this announcement, given how the IRNR has been around for decades uncontested. It amuses me to see the Union has brought this up precisely two weeks after the proposal of the new 100% tax was submitted to Spanish Parliament at May’s end. Gee, if I did not know any better, I’d say the Union is slapping Spain’s wrist like a parent does with a spoilt child, warning him to change course of action or else…

"The closer the collapse of the Empire, the crazier its laws are." — Marcus Tullius Cicero (Roman statesman and lawyer).

At LNA, our friendly team can assist you in buying (or selling) your property anywhere in Spain. We can also get you any residence visa in Spain. Give us a call!

At Larrain Nesbitt Abogados (LNA) we have over 22 years of experience specialising in property conveyance and taxation all over Spain. We also assist clients with immigration & residency visas, and inheritance procedures (probate). You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 0754 3838 218, or Spanish line (+34) 952 19 22 88, or by completing our contact form.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. Ní neart go cur le chéile. VOV.

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