Renting of homes for summer holiday is a good investment, especially if we think about Spain. Affordable prices for real estate mean that many people decide to buy a house with the intention of moving there in the future. Most often, at the same time when the house is purchased, you have a plan for its rentalin futureto reduce the cost of living and to earn money in periods when we can not use it by ourselves.
However, it is worth to know that these investments are not exempt from tax obligations, and property owners are not always aware of these obligations. The obligation to report all information regarding holiday rentals in the real estate to the Spanish Tax Office fact by large booking portals also impacts on much better taxpayer control by the State Administration.
Because the lack of knowledge about fiscal obligations does not release the taxpayer from liability for omissions, therefore we present below what taxes must take into account non-residents owning reale state, regardless of whether it is intended to be used by the owner or for holiday rental.
Most people know the IBI tax (i.e. Impuesto sobre Bienes Inmuebles), which is charged by the City Office in the place where the property is located and usually collected automatically from the taxpayer’s bank account. The amount of this tax depends on the cadastral value of the property. This tax is paid annually by all property owners, regardless of its type: apartment, house, commercial premises or garage, etc.
Another tax paid by property owners who are not fiscal residents in Spain is the tax for non-residents (Impuestosobre la Renta de no Residentes), which has two forms depending on the situation:
- The tax ‘Imputación de la renta’ if real estate is used by its owner and is not rented for profit. The amount of this tax depends on the cadastral value of the property. The declaration must be submitted by December 31 of the year which follows the year to which the settlement relates.
- Tax on income from tourist or long-term rental is incurred when the property is rented to tourists for a holiday stay or to private persons as a permanent residence. A characteristic feature of this tax is that it is paid quarterly in April, July, October and January. The good news is that you can deduct some of your rental expenses as the cost.
If the property is not rented for profit throughout the year, the owner of the property is required to report rental income in the relevant quarters and submit an annual declaration «Imputación de la Renta» for the period when the real estate was not rented andit was used only by the owner.
Our GESTORIA RAMON SANTAFE accounting office offers services related to the completion of tax formalities related to the rental of real estate in Spain with maintaining complete transparency:
- notification of the taxpayer and updating its data in the Spanish Tax Office
- making tax settlements on income from tourist rental
- presentation of tax returns
- tax payment on behalf of clients
