Who taxes foreign rental income: the property country first
Rent is taxed where the property is, wherever the owner lives. Under the OECD Model Tax Convention, the template most tax treaties follow, income from immovable property may be taxed by the country where the property is situated (Article 6(1)), and that covers renting it out, using it directly and any other use (Article 6(3)).
Rent follows the same split as the rest of a nomad's tax bill: residence decides most of it, and the source country keeps a claim on a few kinds of income. Property carries the strongest of those claims. A treaty that follows the OECD Model caps the withholding tax on dividends at 15% under Article 10(2), while Article 6 sets no maximum on rent, so the property country taxes it at whatever its own law says.
Your new country of residence comes second. If it taxes worldwide income, it taxes the same rent and relieves the double charge in 1 of 2 ways set out in the tax treaty between the 2 countries: it exempts the rent (Article 23A), or it deducts the tax paid in the property country from its own tax on that rent (Article 23B). An exempting country may still count the rent when it sets the rate on your other income (Article 23A(3)).
Tax a landlord abroad pays: 4 countries compared
The property country's default for an owner abroad is a flat rate, often on gross rent with no deduction for costs. In the UK, the US and Canada a tenant or agent takes it before the money reaches you, and a form gets you taxed on net rent or paid gross. In Spain the rate and the base follow where you live, and no form changes them.
Source: IRS Publication 519, CRA Guide T4144, GOV.UK and Spain's non-resident income tax law (TRLIRNR art. 25), listed under Sources The UK rate is withheld after the costs the agent pays, and the final UK tax follows the normal rates. The US, Canadian and UK rates can be lowered with the forms described below; Spain's 24% has no such form for owners outside the EU and EEA.
Show the numbers
| Default rate | |
|---|---|
| United States, gross rent | 30% |
| Canada, gross rent | 25% |
| Spain, owners outside the EU and EEA, gross rent | 24% |
| United Kingdom, withheld by the agent or tenant | 20% |
| Spain, owners in the EU or EEA, net rent | 19% |
United Kingdom: the non-resident landlord scheme
HMRC treats you as a non-resident landlord once you live abroad for more than 6 months of the year. Your letting agent, or a tenant paying more than £100 (about $133) a week when there is no agent, deducts basic rate tax at 20% from the rent after the expenses they pay, and sends it to HMRC every quarter (GOV.UK).
You can apply on form NRL1i to have the rent paid with no tax taken off, and either way you declare it on a Self Assessment return unless HMRC tells you not to (GOV.UK). British and EEA citizens keep the Personal Allowance while living abroad (GOV.UK), so for a British or EEA citizen leaving the UK with 1 rented home and no other UK income, the 20% withheld is usually more than the final bill. From April 6, 2027, property income has its own rates of 22%, 42% and 47% in England, Wales and Northern Ireland, and the withholding rises to 22% (GOV.UK).
| Rent for the year | £18,000 (about $23,900) |
|---|---|
| Repairs, insurance and fees the agent pays | £3,000 (about $3,980) |
| Withheld by the agent, 20% of £15,000 | £3,000 (about $3,980) |
| UK tax due, 20% of the £2,430 (about $3,220) left after the £12,570 (about $16,700) Personal Allowance | £486 (about $645) |
| Refund on the Self Assessment return | £2,514 (about $3,330) |
A British citizen with no other UK income and no mortgage. 2026 to 2027 rates from GOV.UK, withholding from the non-resident landlord rules. The UAE has no personal income tax, so nothing more is due there.
United States: 30% of gross rent, or the net-basis election
An owner who is neither a US citizen nor a US resident pays 30% of the gross rent from US property, withheld by the tenant or agent, with nothing deducted for interest, repairs or depreciation (IRS Publication 519). The alternative is to treat all the income from the property as effectively connected with a US business: you then deduct the costs and pay the graduated rates on what is left.
You make that choice by attaching a statement to your return that lists the property and the income from it, and it stays in effect for later years unless you revoke it. The return comes after the year ends, so to stop the 30% withholding during the year you give the tenant or agent Form W-8ECI (IRS Publication 519), with a copy of the election or a statement that you intend to make it (IRS). Nonresident aliens cannot claim the standard deduction (IRS Publication 519), so the graduated rates start at the first dollar of net rent.
| Rent for the year | $24,000 |
|---|---|
| Mortgage interest, property tax, repairs and depreciation | $14,000 |
| Default: 30% of gross rent | $7,200 |
| With the net-basis election: 10% of $10,000 net rent | $1,000 |
Federal tax only, 2026 rates for a single filer: 10% up to $12,400 (IRS), no standard deduction for nonresident aliens (IRS Publication 519). State tax not included.
Canada: 25% of gross rent, or a section 216 return
Canada makes the payer or agent, such as a property manager, withhold non-resident tax of 25% on the gross rent paid or credited to you (CRA Guide T4144). Electing under section 216 lets you file a separate Canadian return and pay tax on net rental income instead, and the CRA refunds any withholding above the tax owed; that return is due within 2 years of the end of the year the rent was paid.
Form NR6 moves the saving forward: once the CRA approves it in writing, the agent withholds 25% of the net rent instead of the gross (CRA), and the section 216 return is then due by June 30 of the following year (Income Tax Act, section 216(4)): June 30, 2027 for 2026 rent. Until the approval arrives the agent withholds on gross rent, so file the form before the first rent payment after leaving Canada, and again by January 1 each year (CRA).
Spain: 24% or 19%, and tax on an empty home
Spain taxes non-residents on Spanish income at 24%, or 19% for residents of other EU and EEA countries that exchange tax information with Spain (TRLIRNR, article 25.1.a). The base differs too: owners living in the EU or EEA can deduct the costs tied to the Spanish rent (article 24.6), while owners living anywhere else cannot deduct any costs (PwC).
So your new country shapes the Spanish bill. On €12,000 (about $13,700) of rent with €5,000 (about $5,690) of costs, Spain takes €1,330 (about $1,510) a year from an owner who moved to Lisbon and €2,880 (about $3,280) from one who moved to London or Dubai (TRLIRNR).
Spain taxes a home you leave empty
A Spanish home that is neither rented out nor your main home still produces taxable income. Spain deems an income of 1.1% or 2% of the property's rateable value, and non-residents pay 24% on it, or 19% if they live in the EU or EEA (PwC). On a rateable value of €100,000 (about $114,000), that is €264 to €480 (about $300 to $546) a year for an owner living outside the EU and EEA, with no rent coming in to pay it (PwC).
Does your new country tax the rent too?
Where you live now decides the second layer. Countries that tax worldwide income add the foreign rent to your return and give relief under the treaty, while territorial tax systems leave rent from a property abroad alone.
Under the credit method you end up paying the higher of the 2 countries' charges. If the property country takes 24% and your new country would charge 30% on the same rent, you pay the 6-point difference at home; if your new country would charge 15%, the credit stops at that 15%, and neither side refunds the rest (OECD Model, Article 23B).
Rent from a property abroad in 8 residence countries, Index data checked September 29, 2026
| Country | Rent from a property abroad | Conditions |
|---|---|---|
| Georgia's territorial tax | Not taxed | Income without a Georgian source is exempt from the first day of residence (Tax Code article 82(1)(u)) |
| Panama's territorial tax | Not taxed | Only income produced in Panama is taxed (Fiscal Code article 694) |
| United Arab Emirates | Not taxed | No personal income tax on local or foreign income |
| Thailand's remittance rule | Taxed only when brought into Thailand | Foreign income earned from January 1, 2024, for residents of 180 days or more |
| Malta for non-domiciled residents | Taxed only when brought into Malta | Foreign income kept abroad is not taxed |
| UK FIG regime | Not taxed for the first 4 tax years, if claimed | After at least 10 consecutive tax years of non-residence |
| Spain's resident tax | Taxed with worldwide income | Relief under the treaty; holders of the art. 93 regime (Beckham Law) pay no Spanish tax on foreign rent for 6 years |
| Portugal's resident tax | Taxed with worldwide income | Relief under the treaty; IFICI exempts most foreign income for 10 years, for listed employment, research and startup roles only |
Thailand and Malta tax the rent only if you bring it in, the logic of the remittance basis: rent paid into an account abroad and left there stays outside their tax.
Renting out your home when you move abroad: the residence question
Renting out the home you leave also helps settle where you live for tax. When 2 countries both treat you as resident, the treaty's tie-breaker rules look first for a permanent home, and a house rented out and handed over to an unrelated tenant is not available to you (OECD Commentary on Article 4, paragraph 13). Each country's own residence test runs first, though, so the tenant is 1 step in becoming non-resident for tax, alongside your days and your family's move.
US citizens: foreign rent stays on the US return
For US expats, tax paid in the property country does not settle the bill: the US taxes citizens on worldwide income wherever they live (IRS), so rent from an apartment in Lisbon is taxed in the US as well as in Portugal.
The foreign earned income exclusion covers pay for personal services, such as wages, salaries and self-employment income (IRS Publication 54), so ordinary rent from a property you rent out falls outside it. The relief is the foreign tax credit: foreign income tax paid on the same rent reduces your US tax (IRS).
Depreciation follows its own rule abroad. Property used mostly outside the United States must use the Alternative Depreciation System (IRS Publication 946), which spreads a residential rental building over 30 years, or 40 years if it was placed in service before 2018.
Selling or inheriting the property: the same country keeps its claim
A gain on selling the property may also be taxed where it is situated (OECD Model, Article 13(1)), so the country that taxes the rent can also tax the gain when you sell after moving, and a new country that taxes worldwide gains adds it to your return with relief.
Property can also bring an estate into inheritance tax abroad in the country where it sits. The US, for example, taxes the estate of a non-citizen who lived elsewhere on US real estate, and the executor must file a US estate tax return once US-situated assets are worth more than $60,000 at death (IRS).
Renting out your home after you move: the steps in order
Most of the paperwork sits in the property country, and the default applies until an approval arrives: in the UK, tax comes off the rent until HMRC confirms in writing that you can be paid gross (GOV.UK).
Before the first tenant moves in
- Find the property country's rule for owners abroad: who withholds, at what rate, on gross or net rent.
- Before the first rent payment, file the form that cuts the default: NRL1i in the UK to be paid gross, NR6 in Canada, and Form W-8ECI to the US tenant or agent, with the net-basis election attached to your first US return.
- Keep every invoice for repairs, insurance, fees and interest: they are what turns gross rent into net.
- Check whether your new country taxes foreign rent, and claim the credit or exemption on your first return there.
- Rent out your former main home to an unrelated tenant on a lease rather than keeping it free for your visits.
- US citizens: report the rent on the US return, depreciate the building over 30 years and claim the foreign tax credit.
David's note
I would keep every yearly withholding slip from the first year on: the NRL6 a UK agent or tenant must give you by July 5 (GOV.UK), the NR4 from a Canadian payer (CRA), the Form 1042-S from a US tenant or agent (IRS). A credit in your new country rests on that proof, and a copy years later from an agent you no longer use is not something I would count on.
