If you are taxed in Finland
Finland taxes you on your worldwide income, including income from a house in Mallorca. A tax treaty with Spain has applied since 2019, and Finland credits the Spanish tax you already paid.
Credit, not exemption
Finland and Spain have a tax treaty that has applied since 1 January 2019. Spain taxes the property first; Finland taxes your income from it as capital income and credits the Spanish tax on the same income. You do not pay twice, but you end up paying at the higher of the two levels — and both countries need to see the same figures.
What you actually declare
While you own it
- No Finnish property tax applies to a home in Spain — Finnish kiinteistövero covers property in Finland only.
- If you only use the house yourself, Finland does not tax the use of it. Spain does: imputed income tax, IBI and, above the thresholds, wealth tax.
- Finland has no wealth tax; the Spanish wealth tax stands on its own.
- Finnish inheritance tax covers the Spanish house if the deceased or the heir lives in Finland; the treaty does not cover inheritance, but a Finnish-resident heir can credit Spanish inheritance tax.
If you rent it out
- Rental income from Mallorca is capital income in Finland, taxed at 30 % up to €30,000 and 34 % above.
- The Spanish tax on the same income is credited against the Finnish tax.
- Keep the Spanish returns and payment receipts — Vero will ask for them. Report the income on form 16B.
- Letting costs and loan interest on the property can be deducted in Finland.
When you sell
- The gain is capital income in Finland, 30 % up to €30,000 and 34 % above. The tax-free rule for your own home applies only if it was your permanent home for at least two years — a holiday home rarely qualifies.
- The 19 % Spanish capital gains tax is credited.
- The 3 % retention at completion is an advance, not a final tax: reclaim it in Spain, then report the sale in Finland.
Five questions for your own adviser
How does Finland credit the Spanish tax on my rental income in practice?
Which of my costs in Spain can I deduct in Finland?
Does owning through a Spanish S.L. change my Finnish position?
Which Spanish filings does Vero want to see, and when?
How does Finnish inheritance tax treat a house in Spain?
