Investing in a holiday home in Spain is a profitable decision, especially if you plan to rent it out during the months when it is not in use. Many foreign owners buy properties with the intention of moving in the future, but in the meantime, they rent them out to earn income. However, this practice entails tax obligations that should not be overlooked.

The requirement to report all information related to vacation rentals of real estate to the Spanish Tax Agency, done by large booking portals, also impacts on a much better control of taxpayers by the State Administration.

With a good real estate tax service in Spain, it is possible to comply with all regulations and avoid penalties, while benefiting from an efficient and transparent tax management.

 

Taxes affecting non-resident owners of real estate in Spain

One of the most well-known taxes for property owners is the IBI (Impuesto sobre Bienes Inmuebles). This municipal tax is paid once a year and depends on the cadastral value of the property. It is payable by all property owners, regardless of the type of property.

In addition to IBI, non-resident owners are obliged to pay the Non-Resident Income Tax, which varies according to the use of the property:

  • Income imputation: if the property is not rented out and is used only by the owner.
  • Rental income: if the property is rented out, either to tourists or on a long-term basis.

Our Real Estate Tax Services in Spain will help you to manage both situations. In the first case, the tax return is filed annually before December 31 of the following year. In the second, taxes are filed quarterly (April, July, October and January), and it is possible to deduct certain rental-related expenses.

What happens if you only rent for part of the year?

When a property is rented only during certain periods, two types of returns must be filed:

  • Quarterly, for the income generated in the rental months.
  • Annual, for the own use of the property in the remaining months (imputation of rent).

The Real Estate Tax Services in Spain allows a clear management of both situations, ensuring that the owner complies correctly with its tax obligations at every moment of the year.

 

Ramón Santafé, Real Estate tax services in Spain

We are experts in tax advice for rentals in Spain. We help non-resident landlords to comply with their tax obligations safely, quickly and efficiently. Our services include:

  • Registration and updating of data with the Spanish Tax Agency.
  • Settlement of taxes on tourist rental income
  • Filing of quarterly and annual tax returns
  • Payment of taxes on behalf of the client

Important: if the property is owned by several owners (e.g. a couple), each person must file a separate tax return and pay their proportional part of the tax.