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Tax guide for holiday rentals

Please note that this information is not intended to be legal advice. If you are unsure about your local tax obligations, we encourage you to check with official local sources or to seek assistance from a qualified professional.
Tax can be tricky, and it is essential to ensure that you keep up to date with your tax obligations and remain tax compliant. The timely preparation, filing and payment of taxes are always your responsibility.
If you are an individual supplying short-term accommodation in Spain, make sure you understand each of the following types of taxes and pay the ones that apply to you:
● Income tax
● Value-added tax (“IVA” or "VAT")

INCOME TAX

If you earn income in Spain, you are likely to have to pay the Spanish tax authorities a percentage of your income as tax. Below is an outline of the tax that may arise on income earned from a short-term rental in Spain and how to pay it to the Spanish national tax authorities.
The tax year in Spain runs from the 1st of January to the 31st of December.


Reporting tax in Spain

Most taxpayers file their income tax returns online. The form used depends on your tax status.
Tax resident individuals are subject to IRPF (Personal Income Tax) and use Model 100 to file their annual tax return and, individuals subject to the special tax regime under article 93 of the Spanish Personal Income Tax Act for workers relocated to Spain use Form 151/150.
Non-resident taxpayers are subject to Non-resident Income Tax Without Permanent Establishment. Those without permanent establishment use Form 210, and non-residents with permanent establishment use Form 200 (Corporation tax and non-resident income tax).


Filing deadline reporting tax

For regular tax residents and individuals subject to the special tax regime, the filing and payment deadline is usually the 30th of June of the following tax year.
If you are a non-resident taxpayer, there are quarterly deadlines for filing and paying Non-Resident Income Tax, which fall on the 20th day of the month following each quarter.


Spanish income tax rates

For regular tax resident individuals, there is a progressive tax scale ranging from 19% to 45%, which varies depending on the autonomous region (Comunidad Autónoma) where you reside.
If you are subject to the special tax regime, a 24% rate applies to the first €600,000 of income, above which a 45% rate applies.
Non-resident individuals are subject to a 24% (regular fixed tax rate), or a 19% rate if they are residents in an EU or EEA country.


The threshold for paying income tax in Spain

A threshold applies for Spanish tax residents, depending on the type of income you receive. If you earn rental income, the limit is typically €1,000. If the rental income received is below this threshold, you are not required to file a tax return.
If you are non-resident or are subject to the special tax regime, there is not a threshold.
Specific rules applicable in Spain to income earned from short-term leasing
Most income from short-term leasing is considered rental income.
However, the income will be considered as deriving from an economic activity if the landlord employs a full-time worker or hotel services are provided, including catering, cleaning, and laundry services. Additionally, if you are a non-resident in this situation, you may have a permanent establishment in Spain. If any of these situations apply to you, additional obligations and particular rules apply, other than the general information provided below. Therefore, we encourage you to seek advice from a qualified professional to make sure you fulfil your obligations adequately.


Expenses that can be deducted from an individual's income derived from short-term leasing

Expenses paid by the rental property owner related to the leasing can be inferred from this income, including:
● Mortgage interest
● Depreciation
● House insurance
● Property taxes
● Garbage taxes
● Agency costs
● Maintenance and repair costs
Please note that taxpayers subject to the special tax regime and non-residents, who are not resident in an EU or EEA country, cannot deduct expenses from their rental income.

Effective depreciation costs on a property are deductible under Spanish law. The depreciation cost will be considered valid if it does not exceed 3% of the cadastral value or the acquisition value of the property, whichever is higher, excluding (in both cases) the land value.
The local tax authorities and the Spanish tax authorities indicate the cadastral value in the local property tax receipt and "Datos Fiscales", respectively, including the allocation of the land and the construction value.


General taxes on property

If you own a house in Spain (either if you are resident or non-resident for tax purposes in Spain) you may be subject to income, wealth and property taxes, regardless of whether it is empty or rented.
If the house remains empty for all or part of the year, a deemed income applies to these periods, being such income equal to 2% of the house’s cadastral value—or 1.1%, if the authorities have reviewed the cadastral value in the last ten years—and proportional to the number of days the house remains empty during the tax year. After that, general income tax rates are applied to determine the tax due.
Furthermore, ownership of properties is subject to local property tax (Impuesto Sobre Bienes Inmuebles, “IBI”). This is a local tax, and the applicable tax rate depends on the municipality.
Finally, properties owned by the individuals (either resident or non-resident) may also be subject to Net Wealth Tax.


Foreign rental income for Spanish tax residents

If you are a tax resident in Spain, any income you receive from the rental of properties located abroad is also subject to Personal Income Tax in Spain. In this case, an allowance may apply to avoid double taxation. This amount of the reduction is limited according to Spanish law and double taxation treaties.


VALUE ADDED TAX

VAT or IVA is applied to most consumer goods delivery and services supplied in Spain.
A person who supplies goods or services in Spain may have to charge VAT and pay this to the Spanish tax authority.


Do I need to collect any VAT from guests if I lease short-term accommodation in Spain?

In general, individuals that habitually or occasionally perform a business activity in Spanish territory for VAT purposes must charge VAT for the supply of goods and services.
However, accommodation services without providing hotel services (including catering, cleaning, and laundry services) is an activity considered subject to but exempt from VAT under Spanish law. If the host only performs this activity, no VAT should be charged, and no registering or filing obligations apply.
In any other case, you are required to register for VAT purposes if you perform VAT taxable activities subject to and not exempt from VAT in Spanish territory for VAT purposes (no minimum threshold currently applies in Spain). This rule applies regardless of whether you are an individual established in Spanish region for VAT purposes.


VAT applies to me. How do I determine how much tax I need to collect from my guests?

On the date of this post, the Spanish VAT rate applicable to the supply of accommodation services is 10%.


VAT applies to me. How do I collect VAT from guests?

If you are obliged to charge VAT on the services provided to your guests, note that you have to collect VAT from them and file VAT returns to the Spanish tax authorities.
To collect VAT from guests, some obligations apply, such as issuing an invoice to guests indicating, among other compulsory information, the price and the amount of VAT due on those services.
VAT returns in Spain typically cover quarterly periods (e.g., January - March, April - June, etc.) and they must be filed by the 20th day of the month following that quarterly period. The payment must be made on the same day the VAT return is filed.
Also, a summarised annual return including all transactions carried out in a year must be filed in January of the following year (exceptions may apply). This return is called a form 390 (Annual summary tax return) and must be submitted by individuals who file quarterly returns.

Please note that this information is not intended to be legal advice. If you are unsure about your local tax obligations, we encourage you to check with official local sources or to seek assistance from a qualified professional.
 

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