Spanish landlords must pay income tax on rent they haven’t collected, a rule that has drawn criticism as evictions and unpaid leases increase.

The law: pay now, collect later

The Spanish personal income tax (IRPF) system follows an accrual principle. Landlords must report rental income as soon as they have a legal right to it, even if tenants fail to pay. The rule aims to stop fraud by preventing owners from delaying tax declarations over late payments.

This approach fails to address the gap between legal rights and actual cash flow. Many property owners now face tax bills on money they may never receive.

Unpaid rent trends upward

Eviction filings for unpaid rent reached 18,300 in 2025, an 11% increase from the previous year, according to data from the General Council of the Judiciary. The National Statistics Institute reports rental delinquency rates above 6%, with small landlords bearing the brunt of the impact. The Association of Rental Property Owners recorded a 15% rise in mediation requests over unpaid rent.

These figures show a strained market. Idealista’s data reveals a 20% decline in rental listings across major cities over the past year, partly because landlords are removing properties to avoid non-payment risks.

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Delayed relief for landlords

The tax code provides limited options for recourse. Landlords can claim deductions for unpaid rent, but only after six months of formal collection efforts. In cases of illegal occupancy, tax relief depends on a final court ruling, which can take years. The process is slow, and by the time relief arrives, the financial strain has already taken its toll.

Many describe the situation as a double burden: lost rent followed by an immediate tax obligation on income they never received. The gap between tax requirements and economic reality continues to grow.

Reforms could simplify deductions for verified delinquency, though any changes must balance fraud prevention with fairness. Until then, the system requires payment before proof of income.

A market under pressure

The uncertainty affects more than individual landlords. It is changing the rental market itself. Small property owners, who supply most of Spain’s rental housing, are becoming reluctant to lease units. The outcome is fewer available properties, higher prices, and a widening gap between those who can afford the risk and those who cannot.