IT’S bad news for Brits who own homes in Spain and rent them out for extra cash or to help pay the bills.

According to economist Santiago Lapausa, the tax paid by Brits on profits earned from rentals will increase by 5% after the transition period unless a specific deal is reached.

Currently, as European Union citizens, Britons pay 19% tax on the profits made from renting out their properties, and after deducting expenses.

This is done every quarter.

However once the transition period ends and Britons are labelled as third country citizens, that tax will increase to 24% of the gross rental income and they will NOT be allowed to deduct any expenses.

The warning was made by Lapausa at the Brexit and now? conference in Marbella, organised by the Centre for Tourism Initiatives, lawyer Ricardo Bocanegra and British consul Charmaine Arbouin.

But it’s not just the Brits who may suffer, given that 50% of the Costa del Sol real estate market and perhaps and even larger percent of the Costa Blanca market relies on British buyers.

Brits are often persuaded to buy properties as the money they can make renting it out while they are away helps pay off the mortgage.

Additionally, property managers have created a whole industry in looking after and managing such properties.


  1. Seems barmy Brexit will cut the legs from under the property market for Brits and their associated businesses. The telling phrase in this article is the one describing britain as “a third-world country”. Two things are likely to happen, one, increased fiddling and tax-dodging, leading to huge fines and property seizures. Two, a massive attempt to unload unprofitable dwellings and a collapse in the holiday housing market.
    Of course, Johnson’s new team of nodding dogs will do nothing to help from their comfy billets in London.

    Location : malaga
    • @S You poor fool, the article correctly states ‘third country citizens’ not ‘a third-world country’! The two definitions are completely unrelated, you just make things up as you go along. Third World Citizens has nothing to do with the economic and cultural development of the country of origin. A third country national is not from the EU, Norway, Iceland, Liechtenstein, Switzerland but merely from another country which could include Canada, New Zealand, the UK, or somewhere else for example. The author has used the correct term and anyway a deal may well be reached Mr Negative!
      The telling fact here, is that you ‘should have gone to Specsavers’ & read the article properly, but quite funny nonetheless.

    • @S Gosh, you really are sad, UK economy doing better than Project Fear foretold btw, as you have yet another of your little snipes at the country you no doubt receive your State Pension/s, ESA, Heating Allowance, NHS Care if needed when & if you visit etc Maybe you ‘burnt your bridges’ when you left the UK to be so angry! Do you agree you read the article incorrectly & didn’t check before writing your rant?
      We split our time between Spain and the UK & enjoy both countries, most expats we know accept the situation and get on with life’s enjoyments as we do!


  2. Spain could do a deal and this problem would “go away” like other “Project Fear” warning in the past.
    If as Stefanjo predicts “unprofitable dwellings and a collapse in the holiday housing market” some UK owners will get severe pain, but also the Spanish economy will suffer.
    I suggest the Spanish can’t afford to “punish” the Brits, it would be shooting themselves in the foot, leg, hip etc.

    Location : Motril

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