Tax and Holiday Rentals

Filed under : Conveyancing & Property Law, Property, Tax Planning - Inheritance

Income earned on the rental of holiday properties in Spain has to be declared to Hacienda, the tax authority. The rate is now 19% but importantly there are a number of expenses that can be set off against the income. These are IBI (rates), Community of owners charges, Agency fees for advertising and maintenance and interest on mortgage.

A spreadsheet showing the dates the property was rented and the expenses to be deducted can be used to calculate the tax payable and to enter the tax return. For rentals in 2016 the deadline is 20th January 2017.

A number of property owners who have their tax base in another country, the UK or Holland for example, are concerned that in previous years they may have been declaring this income in their home country. However, the Double taxation relief treaties prevent this tax being charged twice and the declaration on rental must be made in the country where the property is situated. Evidence of the payment is provided by our expert tax consultant who can provide you with copies of the forms showing the tax payment has been made in Spain. In some cases there may still be a small balancing payment to be made but you will not be charged twice on the same figures.

The registration of Holiday Rental properties in Andalucía is essential for Urban and some rural properties and we can assist with all aspects of the procedure. The system is working efficiently now and if you have any queries email or call us.  For more information and to ensure you meet the tax deadline please contact us on [email protected] or telephone 952 527014.