Langan: As a non resident you are not allowed to claim any expenses against your rental income. Mortgage interest payment is an expense and thus cannot be claimed.
The above is a clear discrimination against non residents who can be and in most cases are EU residents. This discrimination had also been applied on Capital gains Tax until the change over in 2007. SAdly this aspect had not been looked at.
I would look at this further. Here the Government of Spain is fleecing foreigner and sending a signal to Developers, Banks, Estate Agents. Lawyers, Mobile phones etc, that it is OK to carry on with the activity of milking foreignors.
Perhaps, its one of the reasons apart from a biased rent act, poor Court system that buy to let has never taken off in Spain. There are nearly 800,000 units sitting idle and people cant find reasonably priced accommodation to rent.