taxes on property rentals
has anybody submitted the returns since new legislation came in and know where I can get the documents in English
Regards
Posted: Sun Jul 24, 2022 11:03pm
Legendary helpful member
To which new legislation are you referring?
Davebev1 wrote on Sun Jul 24, 2022 11:03pm:
To which new legislation are you referring?
The legislation requiring owners to submit quarterly returns of rental income - see below
Portfolio Servicios Inmobiliarios S.L.
SOLICITORS- LAWYERS
INFORMATION AND TAX IMPLICATIONS FOR
RENTAL PROPERTIES AS A NON-RESIDENT
I. SUMMARY OF THE REGULATION IN THE VALENCIAN COMMUNITY
Tourist dwellings. Valencian regulations establish that “tourist dwellings” are real estate properties that,
regardless of their type, are repeatedly let out for tourist, holiday or leisure use, in exchange for a price
and with immediate availability, for an agreed period of time. It is deemed to be on a “regular basis”
whenever any of the following circumstances is observed in regards to the property:
If it is let for tourist use by enterprises managing tourist dwellings,
If it is made available to tourist user by its owners or title-holders, regardless of the period of
time for which it has been hired in case hospitality services are provided,
Whenever tourist or advertising channels are used.
More detailed information on the applicable regulation to tourism enterprises in the Valencian
Community is available on the Valencian Tourism Website.
Long Term Rentals. This differentiates from the above by the use that is given to the property, not the
duration of occupation. If the property is considered the main residence of the tenants, generally
because it’s rented out for a longer period of time, and they are usually given the option to extend
and/or renew the period of occupancy.
License Registration. The applicable regulations require all tourist dwellings to apply for its registration
at the General Registry of Enterprises, Establishments and Touristic Professionals of the Valencian
Community (“Tourism Register”) by means of a communication from stating that the properties are being
allotted for tourist use, on a standardized printed form addressed to the Territorial Tourism Service
(Servicio Territorial de Turismo) of the province where the dwellings are located. Also commonly known as
a Tourist License, please ask for further information for how to apply.
Please also note that the Valencian Tourism Act provides that any advertising carried out for tourist
homes shall necessarily include the registration number and category of the tourist property.
Compatibility Certificate. This certificate is required for the tourist dwellings license application and is
requested from the corresponding Town Hall where the property is located. The purpose is so that the
urban planning department of the town can certify that the property is compatible for touristic use,
according to its facilities and location. It is now obligatory to present a copy of the obtained certificate
together with the tourist license request (something which before was not required) but it can take some
time to process and be received, due to the overwhelming requests being presented at this current time.
Until this has been acquired, it’s not advisable to continue processing the tourist license registration.
First or Second Occupation License. Upon registration of a tourist dwelling, you will have to supply a
copy of your first or second occupation license, also known as now as a “Declaración Responsible” or
Statement declaration, which states your property meets the requirements set by the local Town Hall for it
to be considered fit for use and ocupation. This normally requires an architect’s report to be carried out on
the property which is handed in to the technical department in the Town Planning Department, along
with any other required documentation and the signed declaration.
Energy Efficiency certificate (EEC). The applicable legislation Read Decreto 235/2013 dates 5th of
April states that it is obligatory to obtain the Energy Efficiency certificate when renting out homes,
apartments, houses or commercial premises, except when the property is not rented out for more than 4
months a year. This normally requires a professional architect or qualified engineer to visit the property to
prepare a report and to give the property an emissions grade, which is then presented and registered with
the corresponding department, depending on where the property is located.
Police Registration of Guest log. The owner or property manager is required to identify all travellers
over 16 years old, by filling out the form "Parte de Hospederías". They must also create a Travellers
Registration Book and all guests must be registered with either the local, or National Police or Guardia
Civil, depending on the municipality where the property is located, within 24 hours of arrival. The rules
were introduced to bring the rapidly increasing number of rental properties into line with hotels, which
have been requesting guests' passport details for years. Every traveller (aged 16+) is required to sign the
Travellers Registration and failure to comply with these obligations may result in fines ranging from €600-
30,000 depending on whether mild or serious misconduct (L.O 4/2015).
Each rental property must be registered with the Police, even if there are several units in the same
building owned by the same owner and each property will be assigned an ID code to be uses as password
into the Guest Registration digital system.
II. TAX IMPLICATIONS FOR RENTAL PROPERTIES AS A NON-RESIDENT
Taxation in Spain may appear to be complicated and can sometimes cause confusion for owners as to
if it has to be paid, when and in what country. Below you can find information of your tax implications
on rental income, however it is a general guideline, so if you would like more detailed information, we
would have to study it on a case by case basis.
Every home owner with a property located in the Spanish territory has to declare any rental income
received and pay the due tax to the Spanish Tax Office before the set date deadlines. Whether you are
a Tax Resident or non-Resident, live in Spain full time or not, rent out all year round or just part of it,
or for renting out any other additional properties that might be in your name. All owners that appear
on the corresponding title deeds for the leased property must pay the due tax according to their
participation percentage.
Generally speaking, there are two fiscal situations to take into consideration:
Non-Residents in Spain that receive a rental income from a property that you use, but may
occasionally also rent out.
Spanish Tax Residents that receive rental income from a property in Spain or abroad.
As a non-resident, the rental income of a property should be declared in Spain, even if you have also
declared it in the country where you are a tax resident. If you are a member state of the European
Economic Area (EEA) you will not have to pay twice as there are dual tax agreements in place, but
depending on each country, it normally has to be declared and then claimed back and deducted as a
double taxation from the country where you permanently reside.
The declaration should be submitted by all property owners and the tax amount paid is calculated
according to the percentage of ownership they have for that property. Remember that the tax is also
calculated depending on the country where you are a fiscal resident, not your nationality. For property
owners that reside in a member state of the EEA, a lower tax percentage is applied compared to the tax
rate used if you resided in any other country in the world.
There is a tax form especially for non-resident property owners where this rental income can be declared
and it should be declared every time some is received, but alternatively it can be grouped together and
presented on quarterly declarations, which is the easiest option. The difference from the rental tax and the
normal non-resident tax is that the rental tax has to be declared during the current fiscal year, whereas
the usual non-resident taxes aren’t presented until the following tax year.
There are set dates to present the declarations, which are as follows:
1
st Quarter January-February-March Before the 20th of April
2
nd Quarter April-May-June Before the 20th of July
3
rd Quarter July-August-September Before the 20th of October
4
th Quarter October-November-December Before the 20th of January
*the Spanish Financial year starts January 1
st
to December 31
st
.
The deadline to be able to set up the payment by direct debit is before the 15th of each month. Any rental
income received has to be declared during the corresponding quarter. If no rental income has been
received, you will not be required to present a declaration, but you will still be liable to declare your
regular non-resident property taxes the following fiscal year for the time the property has not been rented
out.
The tax is calculated according to the net rental income monies received throughout the corresponding
quarter (not on total profit made). However, there are some deductible costs for Spanish Residents and
property owners from member states of the EEA that can be applied, meaning that you can declare total
income minus permitted deductible expenses. If you are a fiscal resident outside of the EEA, unfortunately
you are not entitled to apply any deductions to the received income. Expenses that can be deducted have
to be paid for by the owner, but are associated with the rental property in question and only for during
the period it was rented for. Any invoices or bills that are deducted has to be legal and above board (i.e.
tax paid), containing the name of the property owner, fiscal number, property address. Shop receipts and
tickets aren’t accepted as deductibles; because you can’t prove that they were either paid for by the
property owner or they belong to the rental property.
Permitted deductibles can include utility services, telecommunications provided, local council taxes and
charges (but not fines or late payment fees), administration and maintenance fees, property insurances
and depreciation values. If you bought the rental property with a mortgage, you can also deduct the
monthly interest rates charges (not capital paid) and any policies or costs linked to the mortgage.
The Spanish Tax Office (Agencia Tributaria, but also known as “Hacienda”) have stated regularly how
important it is to declare you rental income tax, regardless of if it’s generated from holiday lets or long
term leases. Don’t make the mistake of not paying your due tax in Spain, or confusing the rental income
tax with the yearly non-resident tax declaration that you may already be paying. The introduction of the
new Spanish rentals legislation means that the government can start to establish ways of checking if you
are paying your tax correctly or not. This is now one of the biggest focus´s, to crack down on tax evasion.
In fact, there’s even been mention that the tax office has employed the assistance of utility companies to
monitor consumption rates of homeowners, especially those who claim to be out of the country. Also,
given the new banking laws that have come into force over the past few years, there are ways for them to
monitor account deposits and to confirm origin of funds. Another measure was to enforce the inclusion of
the name and tax number of the landlord and/or tenants of the yearly income tax declarations, so it can
be crosschecked to see if the other party has presented the corresponding tax declaration.
C/Salvador Dali 8 - Pta 1 - Playa Flamenca - Orihuela Costa - Alicante
Office: (34) 966.73
Posted: Mon Jul 25, 2022 7:44pm
Legendary helpful member
This is not new.
All non-residents receiving rental income should do quarterly tax returns. (Residents do annual tax returns.) Always been a legal requirement to pay tax in Spain on any rental income regardless of where you live. If you live in the UK then thanks to the dual tax agreement, any tax already paid in Spain is taken into account by HMRC when calculating your UK tax.
Tourist Licenses have been compulsory since 2015 for holiday lets but tax was always payable on rental income anyway, just Licenses were voluntary rather than compulsory if you only had one property prior to 2015.