Mortgage in Spain for German buyers

The Doppelbesteuerungsabkommen Spanien-Deutschland (Double Tax Convention 2011, in force since 2013) governs how income, capital gains and inheritance are taxed when you have ties to both countries.

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

• IRNR (Spanish non-resident tax): 19% on imputed rental income (1.1-2% of cadastral value) annually, even unrented
• If rented: 19% on actual rental income, deductible expenses including mortgage interest, IBI, community fees, repairs
• German salary/pension: remains taxed only in Germany under treaty
• AfA depreciation: claim 2% straight-line on building (Anschaffungskosten minus land) on your German Steuererklärung — major benefit for rented properties
• Capital gains on sale: Spain first (19% non-resident with retention), Germany credits Spanish tax paid (Anrechnungsmethode)

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

• Worldwide income subject to Spanish IRPF (progressive 19-47%)
• German pensions reportable in Spain with treaty relief
• German Riester/Rürup pensions: complex treatment, consult tax advisor
• Important: file Modelo 720 if German assets >€50,000 — heavy fines if missed

Spekulationssteuer: Germany's 10-year holding rule for capital gains tax exemption does NOT apply to Spanish-source capital gains. Spanish capital gains are always taxable in Spain regardless of holding period.