Taxation on holiday rentals

Taxation on holiday rentals.

Having administrative authorization to carry out vacation or holiday rentals is just as important as fulfilling the tax obligations arising therein.

In Spain, both residents and non-residents must pay tax derived from renting out properties.

You can differentiate between the following situations:

1. Rentals of houses or apartments without providing tourist services:

a) If it is a resident who rents out a property, the rents obtained are considered income from real estate and must be declared as part of the annual income tax declaration.

b) If the person is a non-resident, then the obtained rents should be declared quarterly using the Tax Form 210, identifying the tenant from each rental. In addition, the non-resident should submit an annual tax declaration, in which real estate is taxed on imputed rents for periods in which the property was vacant.

2. Holiday Rentals providing tourist services

Initial cleaning, linen change, refurbishment, etc… prior to the arrival of a client is not considered a tourist service. However, if linen change, house cleaning etc… takes place during a client´s stay, then this is considered a tourist service.

a) Rental income is subject to VAT (IVA), so that residents and non-residents must submit the appropriate VAT returns quarterly and the annual VAT summary.

b) The income from rents must be declared as explained in Paragraph 1, unless the activity is registered in the Tax Office and the owner has an employee dealing with the rentals. Given these conditions, the rent would be considered as income from economic activities and not income from real estate.

If you need any assistance with your tax returns, please do not hesitate to contact us: nicole@mollmertens.com