Mortgage in Spain for French buyers

The Spain-France Double Tax Convention (1995) governs how income, capital gains, wealth and inheritance are taxed between both countries.

If you remain French tax resident (less than 183 days/year in Spain):

• IRNR (Spanish non-resident tax): 19% on imputed rental income (1.1-2% of cadastral value), even when not rented
• If rented: 19% on net rental income; deductible expenses include mortgage interest, IBI, community fees, insurance, repairs
• French salary, retraite, AGIRC-ARRCO, PER: remain taxed only in France
• Capital gains on sale: 19% Spanish CGT first; French credit applies via treaty
• EU Succession Regulation 650/2012: you can elect French succession law for your Spanish property — useful for forced-heirship coordination

If you become Spanish tax resident (>183 days/year):

• Worldwide income subject to Spanish IRPF (19-47% progressive)
• French pension reportable in Spain with treaty relief
• Modelo 720 required if French assets >€50k per category
• Beckham Law option if relocating for work — flat 24% on Spanish income for 6 years

Action point: coordinate with a French notaire and a Spanish gestor on succession planning. Common mistake: not opting for French law via Regulation 650/2012, which then triggers Spanish forced heirship rules.

If you are French tax resident and your global real estate net wealth exceeds €1.3M, you are subject to IFI in France. Your Spanish property must be included in the IFI base.

How it works:

• Property value: market value (valeur vénale) at 1 January of the tax year
• Spanish mortgage: deductible from the IFI base at outstanding principal
• Spain has its own wealth tax (Impuesto sobre el Patrimonio) on non-residents' Spanish assets — varies by region (Andalusia, Madrid sub-bonificada vs Catalonia/Balearic full rates)
• Treaty relief: Spanish wealth tax paid is creditable against French IFI to avoid double taxation
• IFI rate: progressive 0.5%-1.5% above €1.3M threshold (2024 rates)

Practical tip: if you are buying near the IFI threshold, consider whether the Spanish mortgage size brings your global property value (net of debt) below €1.3M. Holding the Spanish property via an SCI (Société Civile Immobilière) is sometimes used but adds complexity — discuss with a French tax advisor before signing.